Articles Posted in US Court of Appeals for the Federal Circuit

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The VA and Department of Defense (DoD) committed to developing an integrated electronic health records (EHR) system to replace their separate systems but abandoned that plan. DoD replaced its system with a commercially-available system, consisting primarily of software developed by Cerner. The VA issued a request for information and engaged a consultant, Thornton, to assess four options—three involving an off-the-shelf EHR system, and the fourth involving modernizing its existing system. Thornton concluded that the market could support all four options and that the VA’s best option for improving interoperability with the DoD would depend on the VA’s own evaluation. The VA chose to acquire a new system and invoked the public-interest exception to the Competition in Contracting Act’s open competition requirement, 41 U.S.C. 3301, 3304(a)(7), to negotiate a sole-source contract with Cerner “for the acquisition of the [EHR] system being deployed by the [DoD] and related services.” CliniComp, an incumbent provider of EHR systems to the VA, filed a bid protest, asserting that the sole-source decision lacked a rational basis and violated the Act. The Claims Court dismissed. The Federal Circuit affirmed. CliniComp lacked standing to protest the decision. To establish standing, CliniComp had to show that it was “an actual or prospective bidder” and had a “direct economic interest in the procurement or proposed procurement.” CliniComp did not establish that it had the kind of experience that would enable it to compete for the work contemplated by the VA’s planned contract. View "CliniComp International, Inc. v. United States" on Justia Law

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Scotty, born in 1979 at Madigan Army Medical Center, suffered injuries during childbirth, resulting in brain damage, cerebral palsy, seizures, and blindness, necessitating ongoing, around-the-clock care. The Shaws sued and agreed to a settlement, which stated that payments described in paragraph 5 and the purchase of annuities described in paragraph 6 “shall constitute a complete release.” Paragraph 5 provided that the government would pay: $500,000 to the Shaws; $500,000 to Scotty's medical trust; $850,000 to the Shaws’ attorneys; and, for the purchase of annuities to provide payments set forth in paragraph 6, $2,950,000.00. Paragraph 6 set forth the terms for the annuities. Four annuities are at issue: one each for Mr. and Ms. Shaw, one for the guardianship for the benefit of Scotty, and one for the medical trust. The government made each of the specified payments, including $2,846,095 to purchase the annuities. The agreement stated that payments from the annuities for Mr. and Ms. Shaw “are guaranteed for a period of twenty (20) years.” Paragraph 7 noted that the “settlement is contingent on a total, final cost of $4,800,000.00.” The annuities were purchased from ELNY, which later encountered financial difficulties and entered into court-ordered liquidation in 2012. The Shaws's annuity payments were reduced by 20%; payments to the guardianship and the medical trust were reduced by 62.4%. The Shaws sued. The Federal Circuit affirmed summary judgment in favor of the government, which was obligated to guarantee the annuity payments only for the first 20 years. The reduction in payments began after that period. The Shaws lacked standing to sue on behalf of the medical trust. View "Shaw v. United States" on Justia Law

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Plaintiffs each entered into agreements to provide services to Voice of America (VOA), a U.S. government-funded broadcast service. The agreements were a series of individual purchase order vendor (POV) contracts that each plaintiff entered into over several years with the Broadcasting Board of Governors (BBG), which oversees VOA. In 2014, the Office of Inspector General for the U.S. Department of State issued a report that was critical of the BBG’s use of POV contracts, concluding that the BBG was using such contracts in some cases to obtain personal services. Plaintiffs filed a class action complaint alleging that, along with other individuals who have served as independent contractors for VOA, they should have been retained through personal services contracts or appointed to positions in the civil service. If their contracts had been classified as personal services contracts or they had been appointed to civil service positions, they alleged, they would have enjoyed enhanced compensation and benefits. The Claims Court dismissed and denied their request for leave to file a proposed second amended complaint. The Federal Circuit affirmed, rejecting several contract-based claims, seeking damages for the loss of the additional compensation and benefits to which Plaintiffs contend they were entitled. Plaintiffs have set forth no viable theory of recovery. View "Lee v. United States" on Justia Law

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XY’s patents relate to the sorting of X- and Y-chromosome-bearing sperm cells, for selective breeding purposes. Trans Ova provides services related to embryo transfer and in-vitro fertilization for cattle. XY and Trans Ova entered into a five-year licensing agreement in 2004 under which Trans Ova was authorized to use XY’s technology, subject to automatic renewal unless Trans Ova was in material breach. In 2007, Inguran acquired XY and sent a letter purporting to terminate the Agreement because of alleged breaches. For several years, the parties negotiated but failed to resolve their disputes. Trans Ova continued to make royalty payments to XY, which were declined. XY alleges that it became aware of further breaches, including underpayment of royalties and development of improvements to XY’s technology without disclosure of such improvements to XY. XY sued for patent infringement and breach of contract. Trans Ova counterclaimed, alleging patent invalidity, breach of contract, and antitrust violations. The district court granted XY summary judgment on the antitrust counterclaims. A jury found breaches of contract by both parties; that Trans Ova failed to prove that the asserted patent claims were invalid and willfully infringed the asserted claims; and XY was entitled to patent infringement damages. The court denied all of Trans Ova’s requested relief and granted XY an ongoing royalty. The Federal Circuit affirmed except the ongoing royalty rate, which it remanded for recalculation. View "XY, LLC v. Trans Ova Genetics, L.C." on Justia Law

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TAOS and Intersil were both developing ambient light sensors for electronic devices. Ambient light sensors use a silicon- or other semiconductor-based photodiode that absorbs light and conducts a current. The resulting photocurrent is detected by a sensor, and measurements of the current, a function of the ambient light, are used to adjust the brightness of an electronic screen display. One benefit is better visibility; another is improved battery efficiency. In 2004, the parties confidentially shared technical and financial information during negotiations regarding a possible merger that did not occur. Soon after, Intersil released new sensors with the technical design TAOS had disclosed in the confidential negotiations. TAOS sued for infringement of its patent, and for trade secret misappropriation, breach of contract, and tortious interference with prospective business relations under Texas state law. A jury returned a verdict for TAOS and awarded damages on all four claims. The Federal Circuit affirmed liability for trade secret misappropriation, though on a more limited basis than TAOS presented to the jury, and affirmed liability for infringement of the asserted apparatus claims of the patent, but vacated the monetary awards. The court noted that there was no evidence of Intersil’s independent design of the photodiode array structure. View "Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Electronics America, Inc." on Justia Law

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In 2003, the Coalition Provisional Authority (CPA) was established to rule Iraq pending transfer of authority to the Iraqi Interim Government (IIG). CPA awarded Agility a Contract to operate warehouses, providing that “[t]he obligation under this contract is made with Iraqi funds.” Agility acknowledged the impending transfer of authority and CPA’s scheduled dissolution. CPA authorized the IIG Minister of Finance to delegate contract administration to CPA’s Program Management Office (PMO). CPA administered Development Fund for Iraq (DFI), composed of various sources, including revenue from sales of Iraqi petroleum and natural gas. The IIG Minister delegated contract-administration responsibility concerning DFI-funded contracts to the PMO but did not give PMO contracting authority. Subsequent Contract task orders obligated U.S. funds. A U.S. contracting officer (CO) determined that Agility owed the government $81 million due to overpayment. Separately, Agility unsuccessfully sought $47 million for unpaid fees. The Armed Services Board of Contract Appeals dismissed Agility's appeals for lack of jurisdiction under the Contract Disputes Act (CDA), 41 U.S.C. 7101–7109. The Federal Circuit affirmed. The Board’s CDA jurisdiction is limited to contracts “made by an ‘executive agency.’” CPA was not an executive agency under the CDA. CPA awarded the Contract and there was no evidence that it was novated or assigned to an executive agency. The government acted as a contract administrator, not as a contracting party. View "Agility Logistics Services Co., KSC v. Mattis" on Justia Law

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Meridian contracted to construct the Chula Vista Project flood control project, including construction of concrete channels, relocation of a sewer line, and dewatering and water diversion. After commencing work, Meridian encountered problems relating to “a layer of dripping saturated dark clay material under which a clean layer of sand is producing water” with “the potential for serious structural damage.” The government issued contract modifications, including an increase in funds for larger pipe, addition of a reinforced concrete access ramp, investigation of soil properties, remediation of saturated soils, and additional sheet piling. The government directed Meridian to suspend work following structural failures and terminated the project following a final inspection. Meridian sued for breach of contract, breach of the duty of good faith and fair dealing, and violation of the Contract Disputes Act, 41 U.S.C. 601−613. The government conceded liability for certain costs relating to suspension of work, channel fill, and interim protection. With respect to other claims, the Federal Circuit affirmed in part. Meridian’s interpretation of the contract was not reasonable; the existence of subsurface saturated soil conditions was “reasonably foreseeable.” The Trade Court did not impose an improper requirement for investigation of site conditions beyond what a reasonable contractor would undertake. The court remanded for consideration of whether the parties reached a meeting of the minds on flood event claims and held that the Trade Court erred dismissing Meridian’s unpaid contract quantities claim, in light of conflicting information. View "Meridian Engineering Co. v. United States" on Justia Law

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Meridian contracted to construct the Chula Vista Project flood control project, including construction of concrete channels, relocation of a sewer line, and dewatering and water diversion. After commencing work, Meridian encountered problems relating to “a layer of dripping saturated dark clay material under which a clean layer of sand is producing water” with “the potential for serious structural damage.” The government issued contract modifications, including an increase in funds for larger pipe, addition of a reinforced concrete access ramp, investigation of soil properties, remediation of saturated soils, and additional sheet piling. The government directed Meridian to suspend work following structural failures and terminated the project following a final inspection. Meridian sued for breach of contract, breach of the duty of good faith and fair dealing, and violation of the Contract Disputes Act, 41 U.S.C. 601−613. The government conceded liability for certain costs relating to suspension of work, channel fill, and interim protection. With respect to other claims, the Federal Circuit affirmed in part. Meridian’s interpretation of the contract was not reasonable; the existence of subsurface saturated soil conditions was “reasonably foreseeable.” The Trade Court did not impose an improper requirement for investigation of site conditions beyond what a reasonable contractor would undertake. The court remanded for consideration of whether the parties reached a meeting of the minds on flood event claims and held that the Trade Court erred dismissing Meridian’s unpaid contract quantities claim, in light of conflicting information. View "Meridian Engineering Co. v. United States" on Justia Law

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MACOM’s predecessor developed semiconductors using gallium nitride (GaN), obtained patents related to that technology, and sold those patents to Infineon's predecessor, retaining rights under separate license agreement. That agreement defines a “Field of Use” characterized by GaN-on-silicon technology and licenses MACOM to practice the GaN patents within the “Field of Use only.” MACOM and Infineon share rights to practice the patents in the Field of Use. The agreement defines an “Exclusive Field” within the Field of Use in which MACOM has exclusive rights to practice the patents—even as against Infineon. Infineon notified MACOM that it believed MACOM had breached the agreement by making and selling products using GaN-on-silicon-carbide technology, which is distinct from GaN-on-Si technology and outside the Field of Use. MACOM responded that the GaN-on-SiC sales were minimal and that any breach had been cured. Infineon terminated the Agreement. MACOM sued, asserting contract claims and seeking a declaratory judgment of noninfringement and obtained a preliminary injunction. The Federal Circuit affirmed in part, agreeing that MACOM could likely establish that its activity outside the Field of Use did not breach the agreement and that MACOM would suffer irreparable harm in the absence of a preliminary injunction. The court vacated two sentences in the injunction for lacking specificity. View "MACOM Technology Solutions Holdings, Inc. v. Infineon Technologies Americas Corp." on Justia Law

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Securiforce entered into a requirements contract with the government to deliver fuel to eight sites in Iraq. The government terminated the contract for convenience with respect to two sites because Securiforce intended to supply fuel from Kuwait, reasoning that delivery to those sites would violate the Trade Agreements Act, 19 U.S.C. 2501, and that obtaining a waiver would take too long. Weeks later, the government ordered small deliveries to two sites, to occur by October 24. Securiforce indicated that it could not deliver until November. The government notified Securiforce that it should offer justifiable excuses or risk termination. Securiforce responded that the late deliveries were excused by improper termination for convenience, failure to provide required security escorts, small orders, and other alleged irregularities. The government terminated the contract for default. Securiforce filed suit (Tucker Act, 28 U.S.C. 1491; Contract Disputes Act, 41 U.S.C. 7101-09). The Claims Court found that it had jurisdiction to review both terminations; that the Contracting Officer abused her discretion in partially terminating the contract for convenience; and that the termination for default was proper. The Federal Circuit affirmed in part. The court lacked jurisdiction over the termination for convenience; a contractor’s request for a declaratory judgment that the government materially breached a contract violates the rule that courts will not grant equitable relief when money damages are adequate. The government did not breach the contract by terminating for convenience or with respect to providing security. View "Securiforce International America, LLC v. United States" on Justia Law