BRUNSWICK CORPORATION, Plaintiff-Appellant, v. THE UNITEDSTATES,
Defendant/Cross-Appellant, and DIAB-BARRACUDA AB, Involuntary Plaintiff.
97-5017, 97-5021
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
1998 U.S. App. LEXIS 7198; 46 U.S.P.Q.2D (BNA) 1446
March 31, 1998, Decided
NOTICE: [*1] RULES OF THE FEDERAL CIRCUIT OF APPEALS MAY LIMIT CITATION
TO UNPUBLISHED OPINIONS. PLEASE REFER TO RULES OF THE UNITED STATES
COURT OF APPEALS FOR THIS CIRCUIT.
SUBSEQUENT HISTORY: Reported in Table Case Format at: 1998 U.S. App. LEXIS 25939.
DISPOSITION: Affirmed.
CASE SUMMARY
PROCEDURAL POSTURE: Plaintiff patent holder filed a patent infringement action against
defendant United States for infringement of a camouflage screen patent. The United States Court
of Federal Claims ruled that the patent was valid and enforceable and found infringement by some,
but not all, of the accused camouflage screens, and awarded the patent holder damages for the
infringement. The patent holder and the United States appealed.
OVERVIEW: The patent holder had a patent for camouflage screens that were difficult to see or
to detect with radar. The invention was for military applications, and the United States purchased
the patent holder's screens and other allegedly infringing screens. The patent holder claimed that
the lower court erred in failing to find an infringement as to the screens for which no infringement
was found and challenged the lower court's decision to award a reasonable royalty rather than lost
profits. The United States challenged the lower court's selection of the date on which to base the
parties' hypothetical negotiation in computing a reasonable royalty. The court upheld the lower
court's findings regarding infringement and the measure of damages. The court found that (1) the
patent holder's claim as to certain allegedly infringing screens was precluded because they
exhibited a resistivity that was disclosed but not claimed in the patent; (2) the lower court did not
abuse its discretion in selecting a reasonable royalty as the patent holder's reasonable and entire
compensation; and (3) sufficient evidence supported the lower court's finding regarding the date
of the hypothetical negotiation.
OUTCOME: The court affirmed the lower court's finding of infringement and its award of
damages.
CORE TERMS: screen, patent, resistivity, infringement, ohm, cloth, specification, surface,
royalty, camouflage, radar, hypothetical, negotiation, frequency, steel, transmission, polyester,
noninfringing, equivalency, patentee, delivery, license, waves, fabric, written description,
infringing, embodiment, literal, patent expired, procurement
CORE CONCEPTS -
Patent Law: Infringement
In conducting an infringement analysis, the court first determines the claim scope, and then
compares the properly construed claim to the accused device to determine whether all of the claim
limitations are present in the accused device either literally or under the doctrine of equivalents.
Patent Law: Infringement: Doctrine of Equivalents
Patent Law: Infringement: Acts of Infringement
Subject matter that is disclosed in the specification, but not claimed, is dedicated to the public.
The rule applies equally, when an accused infringer practices disclosed but unclaimed subject
matter, to prevent a finding of infringement under the doctrine of equivalents as it does to prohibit
a finding of literal infringement.
Civil Procedure: Appeals: Standards of Review: Abuse of Discretion Patent Law: Remedies:
Damages
The court reviews for an abuse of discretion the methodology selected by a trial court in
calculating damages. An abuse of discretion may be established by showing that the trial court
based its determination on clearly erroneous factual findings, a legal error, or a manifest error of
judgment.
Patent Law: Remedies: Damages
A claimant must at least establish the existence of lost profits through an expectation of
exclusivity by proving four elements: a demand for the patented product, the absence of
noninfringing alternatives, the manufacturing and marketing capacity to exploit the demand, and
the amount of the profit the claimant would have made.
Patent Law: Remedies: Damages
If a device is not available for purchase, a defendant cannot argue that the device is an acceptable
noninfringing alternative for the purposes of avoiding a lost profits award.
Patent Law: Remedies: Damages
A reasonable royalty determination for purposes of making a damages evaluation must relate to
the time infringement occurred, and not be an after-the-fact assessment.
Constitutional Law: Procedural Due Process: Eminent Domain Proceedings Just compensation
is the value of the property taken at the time of taking.
JUDGES: Before, MAYER, Chief Judge, * NEWMAN, and CLEVENGER, Circuit Judges.
Opinion for the court filed by Circuit Judge CLEVENGER. Dissenting opinion filed by Circuit
Judge NEWMAN.
* Chief Judge Haldane Robert Mayer assumed the position of Chief Judge on December 25, 1997.
OPINIONBY: CLEVENGER
OPINION: CLEVENGER, Circuit Judge.
In this patent infringement case, Brunswick Corporation brought suit in the United States Court
of Federal Claims against the United States (government) pursuant to 28 U.S.C. @ 1498.
Brunswick alleged that it was eligible for just compensation for the government's taking of the
invention claimed in U.S. Patent 3,733,606 (the '606 patent) through the government's purchase
of several different styles of camouflage screens. After a bench trial, the court found the patent
was not invalid, was enforceable, and was infringed by some, but not all, of the accused
camouflage screens. See Brunswick Corp. v. United States, 34 Fed. Cl. 532 (1995). The court
then awarded Brunswick $ 10.5 million in compensation for the infringement. [*2] See
Brunswick Corp. v. United States, 36 Fed. Cl. 204 (1996). We affirm.
I
The camouflage screens at issue in this case are fabric screens that are draped over military
hardware, such as tanks and trucks, to shield them from radar and visual detection. The screens
prevent radar waves from reflecting off the covered hardware by absorbing some of the waves
and by reflecting some of the waves in a nonspecular manner, i.e., by randomly scattering the
waves rather than reflecting them directly back to their source. The reflection characteristics of a
radar screen are determined by its thickness, whereby thicker fabric absorbs more waves than
thinner fabric, and by its "surface resistivity," which is measured in ohms. Surface resistivity is a
measure of the fabric's electrical resistance to electromagnetic waves, and indicates how much
power will be transmitted through a material, how much will be absorbed by the material, and
how much will be reflected from the material. A fabric with low surface resistivity lets fewer radar
waves pass through and thus provides better shielding; however, if the surface resistivity falls to
zero ohms, the camouflage is just as reflective as[*3] the target it is trying to hide. If the
camouflage shield absorbs all radar waves, it creates a "black hole" that can be detected by a radar
operator. The ideal radar camouflage has radar reflection characteristics that match the
surrounding terrain (e.g., desert, forest, or grassland) over a wide range of radar frequencies.
Brunswick is the exclusive licensee of the '606 patent, which is entitled "Camouflaging Means
for Preventing or Obstructing Detection By Radar Reconnaissance." The patent issued on May
15, 1973, to Sven-Goran Johansson and was assigned to Barracudaverken AB. From 1973 to
1983, Brunswick was the sole source supplier for camouflage cloth to the government, delivering
more than 200,000 camouflage screens without major reported problems. In 1983, under
direction from Congress, the government started to issue camouflage screen procurements on a
competitive basis. Brunswick won the 1983 bid after lowering its prices substantially. A 1984
procurement was structured so that Brunswick could not receive all of the work. Teledyne Brown
Engineering, whose screens are accused of infringing the '606 patent in this action, received a
portion of the 1984 work. n1 Teledyne[*4] received additional contracts in 1985, 1987, and 1990.
------Footnotes------
n1 Brunswick both manufactured screens from its cloth and sold cloth to Sioux Manufacturing
Corporation, a joint venture corporation with the Devil's Lake Sioux Indian Tribe in Fort Totten,
North Dakota, which made screens for the government under minority and small business
set-aside contracts. Likewise, Teledyne delivered screens to the government under several
contracts and also sold cloth to Sioux Manufacturing.
------End Footnotes------
Teledyne made three different types of cloth screens for the government. The first type, the
"polyester/steel cloth," was formed of a conductive grid of interlaced vertical and horizontal yarns
blended with polyester and steel fibers. The second type, the "modified polyester/steel cloth," used
smaller diameter steel fibers and had fewer steel fibers in the polyester/steel yarn so that the fabric
could operate at higher radar frequencies (around 35 GHz). The third type of cloth screen, known
as the "carbon cloth" screen, substituted carbon or graphite[*5] fibers for the steel fibers to
broaden the frequency coverage of the cloth at high frequencies (above 30 GHz).
The infringement issue on appeal concerns whether the fabrics produced by Teledyne have the
surface resistivity required by the '606 patent. n2 Claim 1 of the patent is representative (emphasis
added):
1. Camouflage means for minimizing detection of objects by radar reconnaissance which
comprises:
a multilayered sheet of flexible material comprising a single electrically resistive layer and
another layer of substantially insulating material,
said electrically resistive layer being constituted by a thin inhomogeneous electrically conductive
film having, at radio frequencies exceeding 2000 MHz, a surface resistivity falling between a
lower limit of 100 ohms and an upper limit of 1,000 ohms but considerably different from 377
ohms to ensure partial reflection from the object of at least 10 percent of the incident radar
power.
------Footnotes------
n2 The written description of the '606 patent explicitly defines surface resistivity as "the
electrical resistance of the surface of a layer material, measured between the opposite sides of a
square area thereof on the surface," typically expressed in ohms per square. Col. 4, lines 25-28.
------End Footnotes------[*6]
The government's specification for radar screen procurement originally required that the
maximum power transmission through the cloth be 15 percent at 10 GHz. In 1984, the
government amended the specification to require transmission between 10 percent and 20 percent,
which corresponds to a surface resistivity or impedance of 87 to 152 ohms, tested at 6 GHz, 10
GHz, 17 GHz, and 35 GHz. n3 Therefore, the government's requirements in its specifications
overlapped with the resistivity range claimed in the '606 patent. The parties dispute whether the
screens procured by the government met the specification, and if not, how close they came to the
100-ohm lower limit for surface resistivity recited in the claims. The trial court found that the
modified polyester/steel cloth and carbon cloth screens literally infringed the claims, see 34 Fed.
Cl. at 581-82, and the government does not dispute that finding on appeal. The trial court also
found that the original, unmodified polyester/steel cloth screens did not infringe the patent either
literally or under the doctrine of equivalents. See id. at 578-81. Brunswick appeals that finding.
------Footnotes------
n3 Power transmission is also expressed in decibels (dB), a logarithmic measure that is used to
quantify power ratios. A power transmission of 10 percent is equivalent to -10 dB, while a
transmission of 20 percent is equivalent to -7 dB. Measuring power transmission is a common
method of determining surface impedance. As noted, a power transmission of 10 percent
corresponds to 87 ohms, while a transmission of 20 percent corresponds to 152 ohms, and a
transmission of 13 dB corresponds to about 54 ohms. Here, we speak of impedance, which is a
complex quantity consisting of a real component (the surface resistance) and an imaginary
component (the surface reactance). The products at issue appear from the record to be
dominantly resistive, so we speak in terms of resistivity.
------End Footnotes------[*7]
In a separate opinion on damages, the trial court made findings regarding damages for
infringement of the modified polyester/steel cloth and carbon cloth screens. The court noted that a
reasonable royalty is most often the proper measure of damages in governmental patent
infringement actions. See 36 Fed. Cl. at 208. Recognizing its broad discretion in selecting a
methodology for computing damages and "the particular nature of the case at bar," the court
determined that Brunswick was entitled to a reasonable royalty rather than lost profits. Id. at 209.
In its reasonable royalty analysis, the trial court applied the entire market value rule and selected
as a compensation base the total cost of procuring all screens delivered during the term of the
patent. See id. at 210-11. Brunswick appeals this ruling with respect to deliveries that were made
soon after the patent expired and were excluded from the compensation base by the trial court.
Following its computation of the compensation base, the trial court selected a royalty rate of
17 percent, based on a hypothetical negotiation that would have occurred on the date that the
government realized it might require a license[*8] from Brunswick and would have been prepared
to negotiate such a license. See id. at 210. The government cross-appeals on this issue, arguing
that the hypothetical negotiation should have been selected for the day on which infringement first
began, not when the parties actually would engage in negotiations over a reasonable royalty.
We have jurisdiction over the appeal and the cross-appeal pursuant to 28 U.S.C. @ 1292(a)(1)
(1994).
II
We first consider Brunswick's challenge to the trial court's finding that the unmodified
polyester/steel cloth screens do not infringe the '606 patent, either literally or under the doctrine
of equivalents. In conducting an infringement analysis, the court first determines the claim scope,
and then compares the properly construed claim to the accused device to determine whether all of
the claim limitations are present in the accused device either literally or under the doctrine of
equivalents. See Young Dental Mfg. Co. v. Q3 Special Prods., Inc., 112 F.3d 1137, 1141, 42
U.S.P.Q.2D (BNA) 1589, 1592 (Fed. Cir. 1997).
The trial court conducted a thorough analysis of the claims. It looked to the plain language of
the claim and determined[*9] that the disputed limitation requires a resistivity between 100 ohms
and 1000 ohms but considerably different from 377 ohms. The government asserted that the claim
required adherence to the resistivity limitation at all frequencies above 2000 MHz (2 GHz) and
that, as a result, the resistivity should be measured as an average over a range of frequencies. The
court rejected that argument and, instead, looked to the purpose of the patent and ruled that the
resistivity requirement must be met for frequencies over which radar threats occur. Neither party
explicitly challenges this claim construction on appeal and we find no fault in the court's careful
analysis.
Although Brunswick agrees with the trial court's claim construction, it accuses the court of
abandoning that construction under the second step of its infringement analysis. Relying on tests
conducted by the Army before this litigation began, the court found that the resistivity of the
accused screens was 50-60 ohms. The court held that that range was well outside the literal scope
of the claims and also, according to the court, outside a permissible range of equivalents.
Brunswick asserts that the court's conclusion was based [*10]on an average of the surface
resistivity of each screen over all frequencies, a measure which the court specifically rejected in
forming its claim construction. Brunswick contends that the screens tested by the Army had
resistivities of between 74 and 87 ohms at 17 GHz, a known radar threat frequency, and that such
resistivities are comparable to resistivities of other screens that the court had found to perform the
same function in the same way to achieve the same result as the invention claimed by the '606
patent. Brunswick thus asserts that the unmodified screens, although outside the literal scope of
the claims, should have been found to infringe under the doctrine of equivalents.
Despite Brunswick's attempt to attack the factual underpinnings of the trial court's conclusion --
one drawn from a mass of evidence both favoring and disfavoring Brunswick's position -- we
conclude that we are bound by the holding in Maxwell v. J. Baker, Inc., 86 F.3d 1098, 39
U.S.P.Q.2D (BNA) 1001 (Fed. Cir. 1996), cert. denied, 137 L. Ed. 2d 327, 117 S. Ct. 1244
(1997), to affirm the court's judgment of no infringement by equivalents. See UMC Elecs. Co. v.
United States, 816 F.2d 647, 652 n.6, 2 U.S.P.Q.2D (BNA) 1465, 1468[*11] n.7 (Fed. Cir. 1987)
("A panel of this court is bound by prior precedential decisions unless and until overturned en
banc."). In Maxwell, this court cited the age-old rule that subject matter that is disclosed in the
specification, but not claimed, is dedicated to the public. See id. at 1106, 39 U.S.P.Q.2D (BNA)
at 1006. Maxwell held that the rule applies equally, when an accused infringer practices disclosed
but unclaimed subject matter, to prevent a finding of infringement under the doctrine of
equivalents as it does to prohibit a finding of literal infringement. See id. at 1107, 39 U.S.P.Q.2D
(BNA) at 1006.
The dissenting opinion argues that, applied in this case, the rule of Maxwell is inconsistent with
earlier precedent of this court and at odds with the Supreme Court's decision in Warner-Jenkinson
Co. v. Hilton Davis Chemical Co., 520 U.S. 17, 137 L. Ed. 2d 146, 117 S. Ct. 1040, 41
U.S.P.Q.2D (BNA) 1865 (1997). We disagree. While the Supreme Court dismissed the argument
that equivalents are limited to what is disclosed in the patent, its decision does not grant the
patentee the right to claim as an equivalent that which is disclosed but unclaimed in the patent and
therefore dedicated to the public. Nor do we understand[*12] the rule of Maxwell, supported by
the broad concept of dedication to the public of disclosed but unclaimed matter, to be any less
applicable to a case in which a clear, definite numerical limitation is placed on a claimed range
than to a case in which an alternative configuration of an article is disclosed but not claimed. In