Justia Contracts Opinion Summaries

Taurus sued DaimlerChrysler, alleging that external websites infringed its patent for “a computer system for managing product knowledge related to products offered for sale by a selling entity.” Daimler Chrysler asserted license and release defenses, asserted a breach of contract counterclaim, and filed a contract claim against third-party defendants (including Orion), which, it claimed violated a 2006 patent licensing agreement between DaimlerChrysler and Orion, to settle prior patent infringement suits. The district court entered summary judgment, finding that the accused websites did not infringe any asserted claims and that certain claims were invalid as anticipated by prior art. The district court found the DaimlerChrysler suit to be exceptional under 35 U.S.C. 285, and awarded damages of $1,644,906.12, for costs incurred in Chrysler’s defense. With respect to remaining issues, the district court: found that certain third parties were alter egos and declined to dismiss for lack of jurisdiction; held that the 2006 agreement did not provide a release to the infringement alleged in the patent suit; held that issues of fact remained as to whether certain third parties had breached a warranty in the 2006 agreement; held that Orion had breached the warranty; and imposed sanctions on Orion and another for pre-trial witness tampering (those parties were not permitted to present evidence to support their defense that Chrysler did not rely on the warranty). The Federal Circuit affirmed, except with respect to attorney fees. View "Taurus IP, LLC v. DaimlerChrysler Corp." on Justia Law

In 2011, the Forest Service solicited proposals for 34 line items, calling for a negotiated procurement process pursuant to Federal Acquisition Regulation Part 15. Each line item sought heavy or medium exclusive use helicopters for large fire support, tailored for a specific base and meeting performance specifications for operation at that base. Croman, an unsuccessful bidder, filed suit, alleging that the Forest Service’s evaluations of proposals did not have rational bases and were contrary to law. The Claims Court granted the government judgment on the administrative record. The Federal Circuit affirmed, finding that the Forest Service had a rational basis for its decision to partially cancel the solicitation and that the Service conducted a proper tradeoff analysis so that its decision was reasonable. View "Croman Corporation v. United States" on Justia Law

USM builds military boats. Working with VT Halter, USM designed a special-operations craft with a hull made out of composite materials for use in competing for the Navy's “MK V Special Operations Craft and Transporter System Contract.” With its 1993 bid, VT Halter submitted drawings stamped with a “Limited Rights Legend” to invoke Defense Federal Acquisition Regulations Supplement Section 252.227-7013(a)(15), which limits governmental use and disclosure of certain information. VT Halter won the contracts and delivered 24 Mark V special-operations craft. In 2004, the Navy awarded University of Maine a research grant to improve the ride and handling of the Mark V and provided detailed design drawings of the Mark V to contractors, stamped with the DFARS Limited Rights Legend, but did not obtain VT Halter’s consent for disclosure. The Navy awarded Maine Marine a contract to design and construct a prototype Mark V.1. USM sued under the Federal Tort Claims Act, 28 U.S.C. 1346(b), alleging misappropriation of trade secrets. The district court awarded damages, but the Fifth Circuit held that the matter lay exclusively within the jurisdiction of the Court of Federal Claims under the Tucker Act, 28 U.S.C. 1491(a)(1). The Fifth Circuit vacated the judgment and ordered transfer. The Federal Circuit affirmed. View "U.S. Marine, Inc. v. United States" on Justia Law

General Dynamics entered into fixed-price contracts, fixed-price incentive contracts, cost-plus-fixed fee contracts, cost-plus-award-fee contracts, and time-and-materials contracts with the Department of Defense. Many require compliance with Cost Accounting Standards (CAS), which provide uniformity in how contractors measure, assign, and allocate costs to government contracts, including guidance for determining and measuring the components of pension cost, CAS 412-20(a). The Defense Contract Management Agency notified General Dynamics in 2006 that its use of a blended rate using partial-year valuations did not comply with CAS 412. The Contracting Officer issued notice of noncompliance in 2007. General Dynamics then submitted a compliant retirement plan, but, in 2008, again submitted a plan using the blended rate for the base year. The CO issued a second determination of noncompliance. The Armed Services Board of Contract Appeals denied General Dynamics’ appeal, determining that use of partial-year asset data reflected short-term fluctuations that could and did introduce distortion prohibited by CAS 412-50(b)(4) and that substitution of a midyear value and a blended rate in place of the 8 percent long-term estimate rate constituted “actuarial assumptions” because they were “estimate[s] of future conditions affecting pension cost” and were encompassed by the prohibitions of CAS 412-50(b)(4). The Federal Circuit affirmed. View "Gen. Dynamics Corp. v. Panetta" on Justia Law

In 1983, the Nuclear Waste Policy Act established a plan for spent nuclear fuel (SNF) generated by nuclear power plants, 42 U.S.C. 10101–10270. The Act made utilities responsible for SNF storage until the U.S. Department of Energy (DOE) accepts the material. The Secretary of Energy entered into contracts with nuclear utilities to accept SNF in return for payment of fees. The Act provided that the Nuclear Regulatory Commission “shall not issue or renew a license” to any nuclear utility unless the utility has entered into a contract with DOE or DOE certifies ongoing negotiations. Nuclear utilities, including the owner of the Entergy nuclear power stations, entered into contracts and began making payments, which have continued. By 1994, DOE knew it would be unable to accept SNF by the Act’s January 31, 1998 deadline. In 1995, DOE issued a “Final Interpretation” that took the position that it did not have an unconditional obligation to begin performance on that date. Entergy sued, asserting that DOE’s partial breach caused it to incur additional costs for SNF storage. The claims court struck an unavoidable delay defense, based on a prior decision rejecting DOE’s argument that its failure was “unavoidable” under the contract. The Federal Circuit affirmed. View "Entergy Nuclear Fitzpatrick, LLC v. United States" on Justia Law

Wilson Sporting Goods agreed to pay Frolow royalties for “Licensed Article(s),” defined as “tennis rackets which are covered by one or more unexpired or otherwise valid claims” of Frolow’s 372 patent. After conducting an audit, Frolow concluded that Wilson was not paying royalties on all the Licensed Articles and filed suit alleging that Wilson breached the License Agreement and infringed the 372 patent. Due to an arbitration provision in the Agreement, the court limited the breach of contract case to determining which Wilson racket models were Licensed Articles and summarily dismissed the patent infringement claim. The court ultimately entered summary judgment for Wilson. The Federal Circuit reversed with respect whether certain rackets were Licensed Articles, reasoning that the fact that Wilson marked their products with Frolow’s patent number supports his allegation that Wilson’s products fall within the claims. View "Frolow v. Wilson Sporting Goods Co." on Justia Law

Sharp, a federal supply contractor, submitted a termination compensation claim to the Department of the Army contracting officer, and later brought a Contracts Dispute Act claim before the Armed Services Board of Contract Appeals, claiming that, because the Army failed to exercise the entirety of the last option year under a delivery order, Sharp was entitled to premature discontinuance fees under its General Services Administration schedule contract. The ASBCA dismissed for lack of subject-matter jurisdiction, concluding that the Federal Acquisition Regulation, does not permit ordering agency contracting officers to decide disputes pertaining to schedule contracts. The Federal Circuit affirmed. Under FAR 8.406-6, only the GSA contracting office may resolve disputes that, in whole or in part, involve interpretation of disputed schedule contract provisions. View "Sharp Elec. Corp. v. McHugh" on Justia Law

In 2001, U.S. Immigrations and Customs Enforcement awarded Northrop a contract for lease and support of Oakley network monitoring software for one base year and three option years at about $900,000 per year. To obtain Oakley’s software, Northrop was required to pay $2,899,710, so Northrup assigned its payment rights to ESCgov for $3,296,093. ESCgov assigned its rights to Citizens, but the government was not notified. In 2005, ICE decided not to exercise the first option. Northrop sent the contracting officer a “Contract Disputes Act Claim for not Exercising Option,” citing the Contract Disputes Act, 41 U.S.C. 601. The letter did not mention the two assignments. The CO denied Northrop’s claim. The Court of Federal Claims dismissed, holding that Northrop had not supplied the CO “adequate notice” because it failed to reference potential application of the Anti-Assignment Act and Severin doctrine. While the matter was pending, Northrop filed a second claim, including documents on the financing arrangements. The CO determined that Northrop’s second claim was the same claim and declined to issue a final decision. The Claims Court again held that it lacked jurisdiction. The Federal Circuit consolidated the cases and reversed, finding that the first letter constituted a valid claim. View "Northrop Grumman Computing Sys., Inc. v. United States" on Justia Law

SEL owns the 463 patent, which names Nagata as a co-inventor. During prosecution in 1991, Nagata assigned his rights to applications and patents related to the patent to SEL’s founder Yamazaki, and subsequently signed a substitute Declaration and Assignment of those applications and patents. From 2002 to 2003, Nagata assisted SEL in a patent infringement suit against another party and was paid for his cooperation and services. In 2009, SEL sued Samsung and others for infringement and contacted Nagata for further assistance, but learned that Nagata had agreed to assist Samsung as a fact witness. Nagata gave testimony repudiating his signature on the 1991 Declarations and Assignments. Samsung then claimed that the patents, including the 463 patent, were unenforceable due to inequitable conduct. SEL sued Nagata, alleging violation of patent law, anticipatory breach of contract, slander of title, and unjust enrichment. The district court dismissed the federal claim for lack of subject matter jurisdiction under 28 U.S.C. 1338(a). The Federal Circuit affirmed; there is no federal cause of action based on assignor estoppel. View "Semiconductor Energy Lab. Co., Inc. v. Nagata" on Justia Law

The Department of Defense issued a solicitation seeking offers for a multiple award, indefinite delivery/indefinite quantity contract for information technology services. The agency described the services as “Net-Centric Integrated Enterprise Information Technology Services,” including help desk, server, network, and applications support services. The solicitation instructed bidders to submit separate bids for the Basic Contract, Task Order 1, and Task Order 2. Every bidder, including Comint, submitted separate bids. The Department then limited the initial award to the Basic Contract and amended the solicitation. Comint acknowledged the amendment. The Source Selection Evaluation Board evaluated each proposal according to factors in the solicitation, the most important of which was “Quality/Capability.” The Board rated Comint’s proposal as “marginal,” concluding that Comint had a “moderate to high associated risk of unsuccessful performance.” The district court rejected Comint’s challenge of the award to another bidder; Comint lacked standing to challenge the solicitation or award because the agency had not erred in rejecting Comint’s bid on technical grounds. The Federal Circuit affirmed, holding that Comint failed to preserve its right to challenge the solicitation by failing to raise objections before award and that Comint has not demonstrated standing to protest the agency’s failure to award it a contract. View "Comint Sys. Corp. v. United States" on Justia Law