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Case 1:92-cv-00580-EJD

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS

SPARTON CORPORATION, Plaintiff,

) ) ) No. 92-580

v.

) ) Chief Judge Damich

THE UNITED STATES, Defendant.

) )

POST-TRIAL BRIEF OF THE UNITED STATES ON APPLICATION OF THE CHRISTIAN DOCTRINE

GREGORY G. KATSAS Assistant Attorney General JOHN FARGO Director GARY L. HAUSKEN Attorney Commercial Litigation Branch Civil Division Department of Justice Washington, D. C. 20530 Telephone: (202) 307-0342 Facsimile: (202) 307-0345

July 22, 2008

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TABLE OF CONTENTS I. FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A. B. C. D. E. II. THE `-0465 CONTRACT AND MOD 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 DEEP DIFAR AND THE "SPIDER " RELEASE MECHANISM . . . . . . . . . . . . . . . . . . . . . 7 CONCEPTION AND REDUCTION TO PRACTICE OF THE CLAIMED INVENTION . . . . . 12 SPARTON 'S ADMINISTRATIVE CLAIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 THE FEDERAL CIRCUIT 'S OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

THE UNITED STATES HAD A LAWFUL RIGHT TO USE THE CLAIMED INVENTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 A. UNDER THE CHRISTIAN DOCTRINE , MANDATORY CLAUSES ARE INCORPORATED BY OPERATION OF LAW .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 THE PATENT RIGHTS CLAUSE EXPRESSES A SIGNIFICANT OR DEEPLY INGRAINED STRAND OF PUBLIC PROCUREMENT POLICY . . . . . . . . . . . . . 27 THE PATENT RIGHTS CLAUSE WAS A MANDATORY CLAUSE.. . . . . . . . . . . . . . . . 29 MOD 4 REQUIRED SPARTON TO PERFORM RESEARCH AND DEVELOPMENT WORK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 THE CLAIMED INVENTIONS WERE BOTH CONCEIVED AND FIRST ACTUALLY REDUCED TO PRACTICE IN PERFORMANCE OF MOD 4 . . . . . . . . . . . . 35

B.

C. D.

E.

III.

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

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TABLE OF AUTHORITIES CASES Federal Crop Ins. Corp. v Merrill, 332 U.S. 380 (1947).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 G. L. Christian & Assoc. v. United States, 312 F.2d 418, aff'd on reh'g, 320 F.2d 345 (Ct. Cl. 1963). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 General Eng'g & Mach. Works v. O'Keefe, 991 F.2d 775 (Fed. Cir. 1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Invitrogen Corp. v. Clontech Labs, Inc., 429 F.3d 1052 (Fed. Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Porter v. United States, 496 F.2d 583 (Ct. Cl. 1974). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Roberts Dairy Co. v. United States, 530 F.2d 1342 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 32 S.J. Amoroso Const. Co. v. United States, 12 F.3d 1072 (Fed. Cir. 1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 33 Sparton Corp. v. United States, 399 F.3d 1321 (Fed. Cir. 2005) (Sparton II). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Sparton Corp. v. United States, 57 Fed. Cl. 455 (2003) (Sparton I). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Sparton Corp. v. United States, 68 Fed. Cl. 34 (2005) (Sparton III). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Yosemite Park & Curry Co. v. United States, 582 F.2d 552 (Ct. Cl. 1978). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Z4 Techs., Inc. v. Microsoft Corp., 507 F.3d 1340 (Fed. Cir. 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

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STATUTES 28 U.S.C. 1498. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 26 35 U.S.C. 102(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 35 U.S.C. 103 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

REGULATIONS 32 C.F.R. 7.103-2 (1969). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 32 C.F.R. 9.107-1 (1969). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 32 C.F.R. 9.107-1 (1971). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 32 C.F.R. 9.107-2(c) (1969). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 34 32 C.F.R. 9.107-2(c) (1971). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 34 32 C.F.R. 9.107-3 (1969). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-32 32 C.F.R. 9.107-3 (1971). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-32 32 C.F.R. 9.107-4 (1969). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 31 32 C.F.R. 9.107-4 (1971).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 31 32 C.F.R. 9.107-5 (1969). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 30, 31 32 C.F.R. 9.107-5 (1971). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30, 31 32 C.F.R. 9.107-1 to -5 (1969). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 32 C.F.R. 9.107-1 to -5 (1971). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Memorandum of August 23, 1971, Government Patent Policy, 36 Fed. Reg. 16887-16892 (Aug. 23, 1971). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28, 29 Memorandum of October 10, 1963 [Government Patent Policy], 28 Fed. Reg. 10943-10946 (Oct. 12, 1963). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

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TABLE OF APPENDICES

A

Memorandum of October 10, 1963 [Government Patent Policy], 28 Fed. Reg. 10943-10946 (Oct. 12, 1963). . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1 Memorandum of August 23, 1971, Government Patent Policy, 36 Fed. Reg. 16887-16892 (Aug. 23, 1971). . . . . . . . . . . . . . . . . . . . . . . . . . . . A6 Extract of Armed Services Procurement Regulation, 32 C.F.R., Part 9 (1969).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A13 Extract of Armed Services Procurement Regulation, 32 C.F.R., Part 9 (1971).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A32

B

C

D

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POST-TRIAL BRIEF OF THE UNITED STATES ON APPLICATION OF THE CHRISTIAN DOCTRINE Sparton Corporation (Sparton) brought this case pursuant to 28 U.S.C. 1498, seeking compensation for the unauthorized use of the claimed inventions of United States Patents Nos. 3,921,120 (the `120 patent) and 4,029,233 (the `233 patent) by or for the United States Navy (Navy). Complaint. This court found that the patent was invalid for being "on sale" under 35 U.S.C. 102(b). Sparton Corp. v. United States, 57 Fed. Cl. 455 (2003) (Sparton I). The case is now on remand from the Federal Circuit, that court's opinion is reported as Sparton Corp. v. United States, 399 F.3d 1321 (Fed. Cir. 2005) (Sparton II). This court's Opinion and Order on Claim Construction, Docket No. 249, is reported as Sparton Corp. v. United States, 68 Fed. Cl. 34 (2005) (Sparton III).

I.

FACTS Both the `120 patent and the `233 patent name James W. Widenhofer (Widenhofer) as the

inventor and have an effective filing date of March 29, 1972. Complaint; Jt. Stip. Facts, Witnesses and Exhibits, Docket No. 299, 2 9 (Feb. 4, 2008) (hereinafter Jt. Stip. Fact). Magnavox Corporation and Sanders Associates, Inc. were selected by the Navy in the 1964-65 fiscal year time frame to design and develop the DIFAR sonobuoy (DIFAR). D17.2; Jt. Stip. Fact at 3-4, 20. The Navy assigned DIFAR sonobuoys the designation "AN/SSQ-53" (SSQ-53). Jt. Stip. Fact at 3-4, 20. The development of the original SSQ-53 spanned a 3-4 year time period, with production of the SSQ-53 sonobuoy first occurring in Fiscal Year 1968. D17.2; Jt. Stip. Fact at 4, 21. Sparton became a third supplier for SSQ-53 sonobuoys in Fiscal

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Year 1969 when the Navy issued Sparton Contract No. N00019-69-C-0465 (the `-0465 contract). D17.2; Jt. Stip. Fact at 4, 22.

A.

THE `-0465 CONTRACT AND MOD 4

In response to the Request for Proposals (RFP) N00019-68-C-0075, Sparton submitted to the Navy a proposal dated January 2, 1969 for production of DIFAR (SSQ-53) sonobuoys. D1.13-.98; D126.40:1-.41:12.1 The DIFAR sonobuoy disclosed in the proposal included a listening device called a "hydrophone" which was deployed at a depth of approximately ninety (90) feet below the ocean surface. D126.40:1-.41:12. The components of the disclosed DIFAR sonobuoy were housed in a housing having a "release plate assembly" at its lower end (as deployed). D126.188:19-.191:3; D126.190:19-192:7; J142.1 & .31. Sparton's offer was accepted by Naval Air Systems Command (NAVAIR) and Sparton was awarded the `-0465 contract. D1.13 The `-0465 contract was effective March 5, 1969. D1.13 It consisted of (a) the `-0075 RFP and Sparton's offer (D1.21-.98); (b) an "Amendment No. 1" of January 3, 1969 (D1.20), and (c) an executed "Award/Contract" Standard Form 26 and ancillary documentation (D1.13-.19). The original `-0465 contract was a multi-year fixed price supply contract based on Sparton's offer, dated January 3, 1968. Jt. Stip. Fact at 4, 23; D1.14. The "Supplies or Services" to be delivered by Sparton under the `-0465 contract included: (1) "AN/SSQ-53 In accordance with the court's Order of July 1, 2008, Docket No. 370, we identify exhibits in the manner prescribed by the court's Pretial Order, Docket No. 290, 3 (June 20, 2007). Exhibit citations are in the general form: [D, J or P][exhibit number].[page number(s)]. Deposition transcript citations are the same, but add citation to the line numbers: [D, J or P][exhibit number].[page number(s)]:[line number(s)]. Citations to the transcript similarly provide page and line numbers in the form [page number]:[line number]. 2
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Sonobuoy[s]"; and (2) "Design Data." D1.14; D1.26-.27. The `-0465 contract included a clause titled "Engineering Change Procedure" (Clause A) (March 1968) (NAVAIR 430-2). D1.40. This clause required that any Engineering Change Proposal (ECP) affecting an item being procured under the `-0465 contract be submitted by Sparton to NAVAIR via the Contract Administration Office. The "Engineering Change Procedure" clause also provided that [e]ach ECP ... shall be prepared and submitted in accordance with the provisions of Air Force-Navy Aeronautical [ANA] Bulletin No. 445, entitled "Engineering Changes to Weapons, Systems, Equipments and Facilities," dated 12 July 1963, and NAVAIR Supplement No. 1 thereto, dated 5 February 1968, and in accordance with any subsequent modification thereto or superseding document ordered in writing by the Procuring Contracting Officer prior to the date the ECP is submitted. If any such document modification or superseding document is ordered and affects the cost of performance of this contract, the contract price shall, pursuant to the procedures provided in the "Changes" clause, be equitably adjusted. D1.40. The `-0465 contract also included a "Changes" clause which provided in pertinent part: The Contracting Officer may at any time, by a written order . . . make changes, within the general scope of this contract, in any one or more of the following: (i) Drawings, designs, or specifications, where the supplies to be furnished are to be specially manufactured for the Government in accordance therewith; (ii) method of shipment or packing; and (iii) place of delivery. If any such change causes an increase or decrease in the cost of, or the time required for, the performance of any part of the work under this contract, whether changed or not changed by any such order, an equitable adjustment shall be made in the contract price or delivery schedule, or both, and the contract shall be modified in writing accordingly. Any claim by the Contractor for adjustment under this clause must be asserted within 30 days from the date of receipt by the Contractor of the notification of change .... D1.25 (item 2); P3.5; 32 C.F.R. 7.103-2 (1969). The `-0465 contract did not list any of the clauses in 32 C.F.R. 9.107-5 (1969) as being incorporated by reference in the contract, nor did it contain modified versions of any of those clauses. D1.22 & .25; P3.5.

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The SSQ-53 sonobuoy initially sold under the `-0465 contract incorporated a rotochute that slowed its descent from an airplane and vertically oriented the buoy so that it would impact the ocean at its bottom end. Jt. Stip. Fact at 4-5, 25; J142.19-.20 & .31; D126.55:8-.56:20. The SSQ-53 sonobuoy produced under the `-0465 contract had a release plate located at the bottom end of the sonobuoy housing which was caused to release from the housing by the sonobuoy's impact with the water. Jt. Stip. Fact at 4-5, 25; J142.19-.20 & .31; D126.59:3-19, .188:19.189:3 & .190:19-.192:7. This permitted the components to exit the lower part of the housing and to descend to their operating depth. Jt. Stip. Fact at 4-5, 25; J142.19-.20 & .31; D126.59:3-19, .188:19-.189:3 & .190:19-.192:7. The DIFAR hydrophone of the SSQ-53 sonobuoys produced under the original `-0465 contract deployed to a depth of 90 feet below the float and cable spool assembly. J142.18-.20. The Naval Air Development Center (`NADC') conducted theoretical studies and sea tests which confirmed that a deeper hydrophone would result in an improved submarine detection capability. Jt. Stip. Fact at 5, 26; D17.2-.3; D123.4 2.1. Prior to November 1970, the Navy concluded that having a deeper depth sonobuoy sensor would be advantageous. D126.125:15-127:3;D132.5; see also D123.4. The Navy made that information available to industry representatives through Navy Security Industrial Association (NSIA) meetings. D126.91:13-.94:4; Tr. (Boyle) 590:22-591:25, 593:12-594:3 & 3495:23-3497:16 (Apr. 23 & May 8, 2008); D92.1. The NSIA meetings were attended by industry representatives including Sparton and other sonobuoy contractors. DX-126 at D126.91:13-.94:4; Tr. (Boyle) 590:22-591:25, 593:12-594:3 & 3495:23-3497:16 (Apr. 23 & May 8, 2008). Sparton learned of the Navy's desire to implement dual depth capability (deep

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depth and the traditional depth) through an NSIA meeting. D126.91:13-.94:4; Tr. (Boyle) 590:22-591:25, 593:12-594:3 & 3495:23-3497:16 (Apr. 23 & May 8, 2008). By at least March 1971, Sparton and other members of the sonobuoy community knew that the Navy was looking for a dual depth sonobuoy. D126.91:13-.94:4; Tr. (Boyle) 590:22-591:25, 593:12-594:3 & 3495:23-3497:16 (Apr. 23 & May 8, 2008). The Naval Air Systems Command (`NAVAIR'), as a result of the fleet recommendations, NADC theoretical studies and sea tests, granted an Engineering Change Proposal (`ECP'), at about the same time, to each of three SSQ-53 producers to supply the Navy with 500 buoys deployable at 90 or 500 feet (Magnavox), 300 buoys at 90 or 1000 feet (Sanders), and 300 buoys at 90 or 1000 feet (Sparton). D17.4; D123.4 3.1. Sparton prepared and provided to the Navy an "unofficial" Engineering Change Proposal 0465-2, dated November 30, 1970. D121.21:22-22:13; D132.1; Tr. (Boyle) 410:2-410:19 (Apr. 22, 2008). It was reviewed by NADC employee William Graff. D121.21:22-22:13. By letter dated March 17, 1971, Sparton submitted its "official" Engineering Change Proposal 0465-2 (the ECP) to contract N00019-69-C-0465 to the Navy. J11.1; J12.1-.2; D130.1.15. Plaintiff's March 1971 ECP submission included: (1) a two-page cover letter dated March 17, 1971 (J11.1 & .3); (2) a two-page standard government Form ME-1017, titled "Engineering Change Proposal (For Use with ANA Bulletin No. 445)," filled out by plaintiff (J12.1-.2); and (3) a ten-page document titled "Engineering Change Proposal for the Dual Depth DIFAR Sonobuoy" (D130.1-.15). Engineering Change Proposal 0465-2 was incorporated in the `-0465 contract on July 13, 1971, when the Navy executed Modification 4 (Mod 4) to that contract.

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D17.10-11 (citing effective date of Mod. 4 and ECP 0465-2 as both being July 13, 1971); D1.9 & .11. The ANA Bulletin No. 445 referred to in the title of Form ME-1017 (J12.1) that accompanied the "Engineering Change Proposal for the Dual Depth DIFAR Sonobuoy" is "Air Force-Navy Aeronautical Bulletin Engineering Changes to Weapons, Systems, Equipments, and Facilities," dated 12 July 1963. DX-235.1-.24. The ANA Bulletin No. 445 identified five types of engineering change proposals: "Preliminary," "Formal," "Secondary," "Compatibility," and "Expedited." D235.3-.4, 4.3. Sparton indicated in its March 17, 1971 cover letter and on the accompanying Form ME-1017 that its ECP was a "Preliminary"-type ECP. J11.1; J12.1, "Type" block. According to ANA Bulletin No. 445, a preliminary ECP may be used for the following purposes: (1) to furnish the procuring activity with available information relative to a proposed change, in order to permit a preliminary evaluation of the change; (2) to permit a preliminary choice of one of various alternative proposals; or (3) to facilitate early contractual coverage for changes that require study before a formal-type engineering change proposal can be submitted. D235.3-.4 at 4.3.2(a). Although the ANA Bulletin required that all boxes of Form ME-1017 be filled in, D235.10 at 7.1, Sparton left blank the item titled "Development Status." J12.2. Plaintiff's response to the item titled "Production Effectivity" was "Future Procurement (if evaluation tests prove proposed merits)." J12.2. Sparton submitted the ECP with the hope of providing an improved product capability that would be incorporated into future procurement. D126.115:7-14. Sparton proposed two phases to the work which would be done under the ECP. DX-130.15 at 2.0. Phase one covered

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design and construction of engineering models and performance of sea tests. DX-130.15 at 2.0. Phase two required modification and delivery of one production lot of 300 AN/SSQ-53 sonobuoys designed for dual depth operation. DX-130.15 at 2.0. In its cover letter, Sparton further explained that the first phase would accomplish the "redesign, modification and test of engineering models to verify feasibility of [the] design approach." J11.1. Further, to accomplish phase one, the government agreed to furnish 35 Sparton AN/SSQ-53 sonobuoys and supply aircraft and support facilities for conducting engineering sea tests, and, for phase two, the government would furnish 300 additional sonobuoys. D130.15 at 4. Sparton offered to accept a modification to the `-0465 contract incorporating the ECP, and perform the work proposed in 7 and 1/2 months for a fixed price of $198,000. J11.1.

B.

DEEP DIFAR AND THE "SPIDER " RELEASE MECHANISM

Between the late 1960's and early 1970, Sparton employee Widenhofer suggested deploying the SSQ-53 DIFAR sonobuoy to a depth of 1000 feet to Sparton's management by using (a) the top end of the sonobuoy as an exit for deployable sonobuoy internal components, (b) a release plate mechanism actuated by a force imparted by a float assembly to either retain or deploy the sonobuoy internal components within or from the sonobuoy housing, and (c) the sonobuoy housing as a descent vehicle to assist the rapid deployment of sonobuoy internal components to a deep depth. D17.5. Mr. Widenhofer called this deployment scheme the `inverse' or `upside-down' deployment design because all SSQ-53 production sonobuoys up to that time contained release plate assemblies located at the bottom of the sonobuoy to deploy sonobuoy components from the bottom end of the sonobuoy. D17.5-.6.

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By September 16, 1970, Sparton had a proposed program and schedule for modifying the SSQ-53 sonobuoy to incorporate the capability of listening at a depth of 1000 feet. J13.1. Under this schedule, the mechanical design was to be complete on or about January 17, 1971, and 20 complete sonobuoys were to be tested on or about February 28, 1971. J13.2. In November 1970, Sparton's employee, Mr. Depew, was assigned the responsibility to prepare a technical description of Sparton's proposed dual depth sonobuoy in the proposal to be given to the Navy. D17.6; D95.102, 2 & 3; D113.1, 5. His technical description was to be hardware oriented and include a layout. D17.6; D113.2, 3. And, on December 2, 1970, James W. Widenhofer proposed a test program for Sparton's deep DIFAR sonobuoy design. J17.1. The purpose of the test was "[t]o evaluate the performance of the proposed inverse sonobuoy package with particular reference to the float pressure activated release plate design." J17.1, "Purpose". As of December 2, 1970, Sparton had completed much of the design effort for the inverse sonobuoy design. J17.3, "Test Date." On or about December 8, 1970, James W. Widenhofer prepared a report entitled "Patent Information on a Float Pressure Actuated Release Plate Mechanism." D93.10-.15. The report is dated, on a handwritten version as having been signed on December 8, 1970 and on a typed version as having been signed on January 7, 1971. D93.11 & .15. The report defines a release plate as "a device which serves to retain the stowed components inside a common housing during storage, shipment and air descent." D93.10 & .14. Upon water entry, the release plate falls clear of the sonobuoy housing, allowing the various components to deploy. Id. The report describes operation of a float pressure actuated release plate which is "blown out of the top end of the sonobuoy" by pressure from the inflating stowed float located directly below the release plate.

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Id. A handwritten note adjacent to Mr. Widenhofer's signature on the second page of the typed version states: "This idea was first documented in a report, `Mechanical Feasibility Design for a Reference Sonobuoy' by J. Widenhofer and C. Werner dated 15 April 1970." D93.15. Beartrap was a classified government program to which Sparton provided supplies or services as a contractor. Tr. (Boyle) 632:8-22 (Apr. 23, 2008) (Beartrap was wide-ranging). The paper entitled "Mechanical Feasibility Design for a Reference Sonobuoy" was prepared as part of the Beartrap program. J75.2 (Beartrap report was the first description of an upside-down design); Tr. (Boyle) 620:3-621:5 (Apr. 23, 2008); D239.22, item 15; D14.1 (Request by Sparton to retain five classified Beartrap documents including "Mechanical Feasibility Design for a Reference Sonobuoy" by J. Widenhofer and C. Werner, dated 15 April 1970, and the Beartrap Sensor Study). And another document the Beartrap Sensor Study, dated January 1, 1971 did survive, and it also describes the operation of an "upside-down" sonobuoy capable of a deployment depth of 3000 feet. D239.10, .12 & .22, item 15; Tr. 638:3-639:17 & 641:12-644.15 (Apr. 23, 2008). Under the Deep DIFAR program, Sparton conducted an air-drop test of the deep DIFAR sonobuoy mechanical design at Key West, Florida on December 19, 1970, in accordance with Mr. Widenhofer's proposal of December 2, 1970. J19.1. Four of the six sonobuoys tested on December 19, 1970, "performed as intended," according to Mr. Widenhofer's report on the test. J19.1. On February 18, 1971, Sparton tested six fully operational deep DIFAR sonobuoys at the Navy base in Key West, Florida. J21.1. The purpose of the tests was to evaluate the mechanical and electrical deep DIFAR design prior to constructing a final engineering lot of twenty sonobuoys. J21.1. The float-pressure-actuated release plate "operated as designed" on all units

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tested according to Mr. Widenhofer's February 26, 1971 report on the testing. J21.3, 3. As a result of the February 18, 1971 test, Mr. Widenhofer concluded: The objective of the two 6 sonobuoy engineering tests has been achieved. The principles involved in the operation of the inverse sonobuoy design with a float pressure actuated release mechanism, or the so call [sic, called] "upside down" design, have been proven workable and, within the limited scope of the testing accomplished to date, reliable. With only minor modifications to the cable pack assembly, the design is acceptable for construction of the final engineering lot of twenty sonobuoys for the purpose of demonstrating Sparton's deep DIFAR capability. J21.2, "Conclusions." Figures 2A and 2B of Mr. Widenhofer's February 26, 1971, report illustrate the deployment sequence of the inverse sonobuoy design tested on February 18, 1971. J21.7-.8. In stage one of that deployment sequence, the sonobuoy enters the water, causing a battery to activate and inflate a float. J21.7. Inflation of the float triggers the release plate, causing the plate to disengage from the sonobuoy and jettison the parachute. J21.7. In stage two of that deployment sequence, the float, radio transmitter and battery rise to the water's surface, while the remainder of the buoy, including the housing, descends while paying out the cable, which is attached to the surface level assembly, through the top of the housing. J21.7. In stages three and four of that deployment sequence, the subsurface sonobuoy components exit from the top of the housing which then falls away. J21.8. Figure 2A of the February 26, 1971 report includes drawings which are substantially identical to figures 1 and 2 of the `120 and `233 patents. Compare J21.7 with J1.2 and J3.2. Figure 2B of the February 26, 1971 report includes a drawing which is essentially identical to figure 3 of the `120 and `233 patents. Compare J21.7 with J1.2 and J3.2. On about March 23, 1971, Mr. Widenhofer proposed a test program for identifying the

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cause of the cable break in the deep DIFAR sonobuoy design tested on February 18, 1971. J26.1. Sparton had identified the design feature causing the cable break problem and modified the design tested on February 18, 1971, to incorporate two thin, narrow mylar strips at the lower end of the sonobuoy housing. J32.6. Addition of the strips cured the problem. J32.6. Mr. Widenhofer submitted a "Final Report" concerning the deep DIFAR program on June 21, 1971, in which he stated: The Deep DIFAR program, Job 7400 is complete. The final engineering lot consisting of twenty sonobuoys has been assembled and is waiting a final determination as to how the buoys may best be utilized. J32.1. One of the major design parameters for the deep DIFAR program was that it lend itself to an easy conversion to a dual depth DIFAR sonobuoy. J32.7. Widenhofer designed a multi-piece plate mechanism, called a spider plate, for use in the mechanical design referenced in the September 1970 Program Schedule, which was used throughout the Deep DIFAR program. D17.7, .8-.9. The Sparton sonobuoys sea tested on February 18, 1971 contained the multi-piece spider plate mechanism. D17.7. Spider plates were known mechanisms, having been previously used as water impact release plates on earlier sonobuoys. See D232.42 (Section C-C); Tr. (Boyle) 662:5-663:7 (Apr. 23, 2008); Tr. (Hudson) 2330:11-2332:6 (May 2, 2008). Defendant's Exhibit 141 is a drawing of the upper end of the Deep DIFAR sonobuoy illustrating the location of the release mechanism. Tr. (Boyle) 652:3657:8 (Apr. 23, 2008); D141.1. The drawing was prepared by Mr. Widenhofer. Id.; D126.177:14-178:20; D141.1. The drawing shows a "spider plate" from the SSQ-50 sonobuoy used as a float actuated release plate. Tr. (Boyle) 652:3-657:8 (Apr. 23, 2008); D141.1.

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A "spider plate" is composed of three arms integral to a central ring, and had three tabs each corresponding to an arm that were attached the ends of the arms opposite the central ring. Tr. (Boyle) 652:3-657:8 (Apr. 23, 2008); D141.1; D232.42 (Section C-C). Each tab engaged an opening in the circumferential wall of the casing. Tr. (Boyle) 652:3-657:8 (Apr. 23, 2008); D141.1; D232.42 (Section C-C). In the operation of the Deep DIFAR, the expanding float applied a force to the bottom center of the plate, causing it to move upward, causing the spider arms to withdraw inward. Tr. (Boyle) 652:3-657:8 (Apr. 23, 2008); D141.1; D232.42 (Section C-C). The tabs would them be removed from the openings of the casing, allowing the release mechanism to fall free and the sonobuoy to deploy. Tr. (Boyle) 652:3-657:8 (Apr. 23, 2008); D141.1; D232.42 (Section C-C). The nonpatented Widenhofer Deep DIFAR sonobuoy containing the spider plate was the one tested by Sparton to and through the July 13, 1971 execution of Mod 4. D17.10-.11.

C.

CONCEPTION AND REDUCTION TO PRACTICE OF THE CLAIMED INVENTION

"Conception of the 120 and 233 claimed inventions occurred between July 29, 1971 and November 23, 1971, when this single part release plate was conceived for use in the dual depth sonobuoy." D17.13. Shortly before the award of the ECP, Mr. Widenhofer provided his views as to what modifications to the Deep DIFAR design should be considered for the Dual Depth DIFAR of the ECP. J31.1. His June 15, 1971 memorandum states: "Release Plate Design Highly simplified designs are feasible and should be investigated at this time (a major cost feature). The existing design used on Deep DIFAR appears to be dependable." J31.2.

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Sparton maintains a log of its engineering drawings. D126.23:8-10. On page 19 of Book No. 2 of that log, there is an entry stating: "900-4623, A, JWW, Sonobuoy Release Plate, 6-30-71, 8000, 100." D95.112-113. The entry indicates that James Widenhofer was responsible for the number 900-4623 being assigned to a sonobuoy release plate on June 30, 1971. D126.264:8-267:9 & 271:21-273:19; D95.11 &.112-.113. That does not mean the drawing existed on that day: under Sparton's documentation control scheme, a drawing number could be assigned before the drawing was created. D126.266:20-.267:8. Sparton mechanical drawings are assigned numbers sequentially. D126.17:19-20:17. A draftsman receives input from the design engineer in the form of a sketch or verbal guidance. DX-126 at D126.17:19-20:17. The size of a Sparton mechanical drawing is identified by the letters A, B, C, D, or E, A being the smallest. D126.22:10-23:7. The number assigned to a Sparton mechanical drawing is the same as the number assigned to the corresponding part. D126.20:10-13. The ECP was incorporated into the `-0465 contract on July 13, 1971, when the Navy executed Mod 4. D1.9. Shortly thereafter, memorandum by R. T. White summarizes a meeting held on July 20, 1971, to discuss the work plan for supplying dual depth DIFAR sonobuoys under the ECP. J35.1-.2. Mr. Widenhofer attended that meeting. J35.1. The design of the ECP sonobuoy would be based on the Deep DIFAR sonobuoy design. J35.1. In reporting on items for the mechanical redesign, the memo stated, "[t]he release plate mechanism should be simplified." J35.2. The memorandum also indicates that the ECP effort would be accounted for under "Job 7400" by its use of that job number for the meeting. J35.1. A "job number" is a method by which Sparton accumulated or tracked costs for a project. Tr. (Boyle) 407:9-408:3 (Apr. 22, 2008). Here, Sparton used the same number, No. 7400, for both its "in-house" Deep

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DIFAR project and its Dual Depth DIFAR project under the ECP. Tr. (Boyle) 407:9-409:6 (Apr. 22, 2008). However, the projects can be distinguished temporally because the Deep DIFAR ended with the Final Report on June 21, 1971 (J32.1) and the Dual Depth DIFAR "Job No. 7400" began with issuance of Mod. 4 on July 13, 1971 (D1.9). On or about August 13, 1971, Mr. Widenhofer performed calculations to determine what pressure an inflating float must exert to bend a release plate. D95.4-.5 & .83-.95. And, on August 31, 1971, Sparton conducted engineering tests of its dual depth DIFAR design at St. Croix, U.S. Virgin Islands with Navy assistance. J43.1. Ten operational Deep DIFAR sonobuoys were dropped from an airplane into the sea. J42.1; J43.2. The sonobuoys used in the test were Deep DIFAR sonobuoys. J42.1; J43.2. According to test report prepared by Messrs. Widenhofer and Huntoon, the August 31, 1971 test demonstrated that the cable break problem observed at the drop tests of February 18, 1971 had been solved. J43.2. The report referenced "Job 7400" and also indicated that a problem identified during the test could "result in significant delay to successful conclusion of the dual depth DIFAR E.C.P." J43.1-.2. Then, on or about October 13 and 14, 1971, Mr. Widenhofer made calculations entitled "D2 Difar Release Plate Bending Moment Considerations" in which he calculated the pressure that an inflating float must exert to bend a release plate. D95.4-.5 & .91-.95. "By October 1971, Widenhofer considered the `bending moment' of a `new [single-piece release] plate design,' and made a `Preliminary Layout' drawing 900-4709 of the dual depth sonobuoy with the new release plate design identified in Section AA by part No. 900-4263." D17.12 (bracketed material in original). Sparton drawing no. 900-4709 is titled "Preliminary Layout, Dual Depth DIFAR, 7400-1008," and dated October 10, 1971. The area of the drawing

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labeled "Section AA" shows parts labeled "900-4623, Plate, Release, Steel," "R-32, Rubber Band," and "900-4746 Bridle Racket Assy, Steel." J45.1 & .6. The release plate identified as "900-4623" in section AA of drawing no. 900-4709 is a generally circular steel plate having a pair of locking tabs which would be inserted into openings in the sonobuoy housing. J45.1. The plate also has three elongated openings along the diameter which form a hinge line. J45.1; D126.243:16-.248:7. The release plate shown in section AA of drawing no. 900-4709 has a pair of slots in each tab which serve as a receptacle for the bridle bracket assembly to which the parachute shroud lines are connected. J45.1; D126.243:16-.248:7. A line connecting the slots is perpendicular to the hinge line. J45.1; D126.243:16-.248:7. On November 5, 1971, Sparton conducted an air-drop test of four dual depth sonobuoys at Key West, Florida, with Navy assistance. J53.1. The purpose of the test, according to a report by Mr. Widenhofer, was "[t]o evaluate the performance of the proposed dual depth DIFAR sonobuoy package with particular reference to the new single part float pressure activated release plate design," among other features. J53.1. The report again references "Job No. 7400" and Mr. Widenhofer refers to the "schedule" as being "tight." J53.1 & .4. The single part float pressure activated release plate functioned normally on two of the four units tested on November 5, 1971, according to Mr. Widenhofer's test report. J53.2. The malfunctioning of the other two units was caused by the bottom casting of the sonobuoy separating from the housing. J53.2. This problem was caused by sheared screws attaching the bottom casting to the sonobuoy housing and could be fixed by simply using longer, stronger screws. J53.2. This malfunction was unrelated to the release plate design. J53.2. In his report based on the November 5, 1971 test, Mr. Widenhofer concluded that the designs for the single

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part release plate, the parachute release mechanism, the parachute attachment system and the float attachment system were acceptable for further evaluation without modification. J53.2. Sparton has further conceded that [t]he single piece release plate was also the subject of (a) an October 5, 1971 Sparton memo relating to a Proposed Test Program for the "new single part float pressure activated release plate design" and (b) a November 11, 1971 memo relating to a November 5, 1971 air drop test conducted to evaluate the performance of among other things the "new single part ... release plate design ...." (and parachute anchoring and release mechanism). Two out of four of the new single part release plates functioned normally in the November 5 test, such that Widenhofer considered the design "acceptable for further evaluation without modification." D17.12-13. "On November 23, 1971, a Sparton engineering drawing 900-4623 was created for the new single part release plate design." D17.13. On or about November 31, 1971, James Widenhofer initialed "C" sized drawing 900-4623 of a single part float pressure activated release plate. D126.249:13-250:9; J55.1. The "C" sized drawing is the second version of this drawing produced, as indicated by the numeral "2" located next to the drawing number. D126.249:13-250:9; J55.1. Mr. Widenhofer designed the release plate shown in the drawing 900-4623. D126.249:13-250:9; J55.1. The plate shown in drawing no. 900-4623 is generally circular. D126.250:17-.254:7; J55.1. The flat plate has a pair of locking tabs for engagement of the sonobuoy housing. D126.250:17-.254:7; J55.1. Three elongate openings at the diameter of the plate form a hinge line. D126.250:17-.254:7; J55.1. The plate would deform along the hinge line if sufficient force were applied. Slots within the tabs accept the bridle bracket assemblies to which the parachute shroud lines can be attached. D126.250:17-.254:7; J55.1. A line connecting the slots is perpendicular to the hinge line. D126.250:17-.254:7; J55.1.

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On January 13, 1972, Sparton conducted an air-drop test of ten fully operational dual depth DIFAR sonobuoys at St. Croix with Navy assistance. J60.1-.2. The purpose of the January 13, 1972 test was to evaluate the dual depth DIFAR design prior to commitment of a final design to be applied to the ECP's 300 production sonobuoys. J60.2. As reported by Mr. Widenhofer, two problems noted at the previous test of November 5, 1971, had been corrected by the newer design. J60.2. The redesigned "float spacer can" performed as intended. J60.2. The problem of bottom casting separation was corrected by using larger screws to fasten the bottom plate to the sonobuoy housing. J60.2. The report references the `-0465 contract, ECP 0465-2, and Job 7400 (partially obscured in the upper right corner). "Aircraft drop tests of the Sparton dual depth sonobuoy with single part release plate were conducted in January, February and March 1972, the last being conducted during the week of March 6, 1972." D17.13. The only major problem observed at the January 13, 1972 tests was a loss of electronic audio signal on five of the ten buoys tested. J60.1. A report of the testing co-authored by Mr. Widenhofer does not mention any malfunction of the upside-down deployment design or the release plate. J60.1-.2. Nor does the report indicate any relationship between the electronic failure and the upside-down deployment design. J60.1-.2. On February 9, 1972, Sparton conducted an air-drop test of eight dual depth DIFAR sonobuoys at the St. Croix facility with Navy assistance. J63.2. Six of the eight buoys appeared to deploy normally. J63.2. Of the two that did not deploy normally, the first had a sea water leak around the plug in the cable weight assembly, and the second had a broken strap on the bottom end of the mass damper. J63.2. Mr. Widenhofer did not report any problems with the upside-down deployment design or the release plate. J63.2.

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On February 10, 1972, Sparton conducted an "over-the-side" test on seven dual depth DIFAR sonobuoys at St. Croix with Navy assistance. J63.3. According to Mr. Widenhofer's report, all seven buoys deployed normally. J63.3. By February 28, 1972, all assemblies for the 300 dual depth DIFAR sonobuoys to be delivered under the ECP had been completed and released by the Sparton Engineering department. J64.1. As of that date, Sparton expected delivery of the 300 buoys to commence during April 1972. J64.1 The reports for both of the February tests also reference "Job No. 7400." On March 9, 1972, Sparton conducted air-drop engineering tests of the dual depth DIFAR design on 10 sonobuoys at St. Croix with assistance from the Navy and VAST, a government contractor. D126.139:6-142:22; J65.1. The purpose of the March 9, 1972 test was to evaluate the overall performance parameters of the dual depth sonobuoy design prior to final design release for the 300 production sonobuoys to be delivered under the ECP. J65.1. Mr. Widenhofer's test report for the March 9, 1972 test states that the test was "very successful." J65.1. Mr. Widenhofer reported that Navy personnel Bill Graff and Bill Mellis observed the March 9, 1972 test and were satisfied with the performance of the buoys. J65.1. All 10 sonobuoys deployed normally at the test on March 9, 1972. J65.2. Mr. Widenhofer's report references the `-0465 contract, ECP 0465-2 and Job No. 7400. J65.1. This test was "very successful" and resulted in the release of the design for production of the 300 deliverable sonobuoys according to Mr. Widenhofer's Final Report on the dual depth DIFAR effort under the ECP, dated April 28, 1972 (Final Report). J66.2 & .22. The March 9 test concluded the engineering test phase of the dual depth DIFAR program and the engineering development phase of the ECP. J65.1; J66.2.

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Mr. Widenhofer prepared a report dated April 28, 1972, identifying the subject of the report as "Job 7400 - Dual Depth Difar Final Report (AN/SSQ-53 (DD)) Contract No. N0001969-C-0465 ECP 0465-2." J66.1. In the report, Mr. Widenhofer stated that "[a]lthough a number of design problems were confronted during development, all were successfully overcome." Modifications made to correct the mechanical problems encountered in previous tests were successful in the March 9 test. J66.2-3. As of the engineering test on March 9, "[t]he existing design on the sonobuoy top end, incorporating the parachute, the parachute retainer, and release plate, and the float spacer, ha[d] proven to be inexpensive and reliable" according to Mr. Widenhofer's Final Report on the dual depth DIFAR project. J66.26. Following the March 9 test, Mr. Widenhofer reported that improving reliability or producibility of the dual depth DIFAR design did not require any change to the basic design concept. J66.2, D73.14, D73.23. Sparton used the March 9 test as the basis for releasing the dual depth DIFAR design for production of the 300 sonobuoys to be delivered under Mod 4 and the ECP. J66.23. When a drawing is "released" within Sparton Corporation, it is released for general use by the company, including for use by the manufacturing and purchasing departments. D126.193:22-195:8. The project engineer and the chief engineer for a product authorize the release of the drawings. D126.193:22-195:8. As of April 28, 1972, Sparton expected to complete the 300 ECP production sonobuoys by May 19, 1972. J66.2. "The April 28, 1972 Widenhofer Final Report on the dual depth sonobuoy addresses the history of design problems encountered in Sparton's dual depth DIFAR program, the modifications made to the dual depth sonobuoy to solve these problems, and the number of sea

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tests (3) performed on fully operational sonobuoys as well as other tests (4) performed on Sparton's dual depth sonobuoys." D17.14. The Final Report states that [a] shallow water airdrop of the preliminary mechanical design was run in November 1971. The purpose was to evaluate the newly designed hardware with particular reference to the float pressure actuated single part release plate with its unique parachute attachment system, the simplified parachute release mechanism, the twist lock float attachment system, and the rotary depth selector. All of the above systems proved to be acceptable. J66.22. The 300 Sparton dual depth sonobuoys were delivered to the Navy in three shipments dated April 25 (100 buoys), June 9 (40 buoys) and June 13, 1972 (160 buoys). D17.15. All 300 sonobuoys delivered to the Navy under Mod 4 to the `-0465 contract incorporated the single piece release plate shown in Drawing 900-4623. J66.23 (the March 9 test was "used as the basis of [sic, for] releasing the design for production of the 300 deliverable buoys"); D17.15-.16 ("Sparton substituted the single piece bendable release plate recited in all `120 and `233 patent claims for the Depew multi-piece release plate mechanism proposed in the ECP as incorporated in Mod 4."). On April 25, 1972, the Navy received a shipment of 100 dual depth sonobuoys produced under the ECP. J76.1; D121.42:2-46:4. The sonobuoys were shipped to the attention of William Graff. J76.1; D121.42:2-43:15. At that time, William Graff was an electronic engineer at the Naval Air Warfare Center in Warminster, Pennsylvania. D121.2:3-10. The ECP sonobuoys were shipped to Mr. Graff so that he could then distribute them to Navy P-3 squadrons in the Atlantic fleet and the Pacific fleet as well as to those located in Hawaii, Bermuda, Iceland and the Mediterranean. D121.43:18-46:4. The squadrons were to test the ECP sonobuoys alongside standard SSQ-53 buoys. D121.43:18-46:4. The purpose of those tests conducted with ECP

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sonobuoys was to evaluate the acoustical performance of the sonobuoys in various operating areas of the world where ocean temperatures and conditions differ. D121.43:18-46:4. The tests compared the operation of dual depth SSQ-53 sonobuoys to standard SSQ-53 sonobuoys to determine which would perform better under certain conditions. D121.43:18-46:4. A second shipment of 160 sonobuoys was also distributed by Mr. Graff to the fleet for testing. D121.62:7-.65:19. Mr. Graff received data reports from these tests, which he analyzed and reported as he had with the first shipment. D121.63:1-.64:13. On the instructions of Mr. Graff, the remaining 40 Sparton dual depth sonobuoys produced under Mod 4 of the `-0465 contract were delivered to the Naval Air Station at Key West, Florida, on June 9, 1972. D121.64:14-67:10; J77.1. The testing procedure used with the ECP sonobuoys was authored by William Graff, and is recorded in an "Evaluation Plan" for "Selectable Depth AN/SSQ-53 Sonobuoys," dated February 28, 1972. D121.47:20-49:20; D123.1 & .4. The purpose of the tests conducted according to the Evaluation Plan was "to evaluate the anticipated advantages of a deep hydrophone array with SSQ-53 DIFAR sonobuoys." D123.4. The tests used dual depth sonobuoys produced by Magnavox, Sanders and Sparton, each produced according to an Engineering Change Proposal under an existing production contract. D121.50:7-53:22. The tests were not specifically directed to the Sparton sonobuoys. D121.50:753:22. The Sparton dual depth sonobuoy tested used the "upside-down" deployment design. D121.59:13-61:21. The Magnavox and Sanders models did not deploy in this manner. D121.59:13-61:21. In those models, the electronic components deployed from the bottom of the sonobuoy housing. D121.59:13-61:21. The Evaluation Plan does not mention the different

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methods of deployment used by the different models because it would not be significant to the personnel conducting the tests. D121.59:13-61:21. The Evaluation Plan does not request any information be gathered on the deployment of the sonobuoys. DX-123.4 -.11. Mr. Graff was not interested in the specifics of each sonobuoy's design, but in how it performed in deep mode. D121.76:3-20. During the testing supervised by Mr. Graff, Navy fleet squadrons conducted the tests in accordance with their standard operational tests involving tracking a submarine. D121.45:12-46:7. According to the test procedure, if a squadron planned to track a submarine using a DIFAR sonobuoy, it would also use a Dual Depth SSQ-53 sonobuoy for tracking at the same time in order to collect data from the two types of buoys in a uniform manner. D121.45:12-46:7. The "Evaluation Plan" instructed the Navy aircraft to: (1) deploy both a standard, shallow depth SSQ-53 sonobuoy and a dual depth sonobuoy set for deep depth in the same location; (2) fly to a second location 15 or 25 miles from the first; (3) deploy the two sonobuoys at the second location; (4) communicate with the participating submarine which would then proceed along a predetermined course; and (5) collect data from the sonobuoys. D123.6-.9. The Navy's testing of dual depth sonobuoys according to the Evaluation Plan lasted approximately one year. D121.51:14-16. The data collected by the fleet was sent to William Graff at the Naval Air Development Center at Warminster, Pennsylvania. D121.48:13-49:13; D123.4. Mr. Graff prepared approximately four to six reports based on this data over the course of approximately a year for the Naval Air Systems Command. D121.52:6-57:18. In his reports based on this data, Mr. Graff stated that the sonobuoys operating at a deep depth showed an

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improved detection capability because they were able to track a given submarine for a longer period of time as compared to those operating at a shallow depth. D121.51:14-.52.15 & .57:23-58:10. On this basis, Graff suggested that it was "worthwhile" adding dual depth capability to the SSQ-53 sonobuoy. D121.51:14-.52.15 & .57:23-58:10. Mr. Graff did not recommend the purchase of dual depth sonobuoys from any one manufacturer over those of the other two. D121.51:14 .52.15 & .53:16-.55:15. Because the testing of the dual depth sonobuoys was considered internal to the Navy, none of the three contractors who produced the sonobuoys were given any written reports regarding the results of the testing. D121.74:7 - .75:8. Mr. Graff or other Naval Air Development Center personnel provided only "unofficial" feedback to the contractors if they experienced a reliability problem with the sonobuoy during testing. D121.74:7-75:4. The sonobuoys shipped to Key West were evaluated there according to the Evaluation Plan by a Navy squadron located in Key West known as "VX-1" whose mission was to evaluate new avionics systems. D121.64:14-65:24. Mr. Graff believed it was desirable to have the VX-1 squadron involved in evaluating the sonobuoys in order to have the sonobuoys distributed and tested by as many different squadrons within the fleet, and at as many different locations around the world, as possible. D121.72:22-.73:18.

D.

SPARTON 'S ADMINISTRATIVE CLAIM

Sparton submitted an administrative claim to the Navy on February 11, 1981, requesting compensation for the unauthorized use of the inventions claimed in the `120 and `233 patents by Magnavox, Sippican and Hazeltine Corporations. J80.1. In furtherance of that claim, Attorney

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Paul J. Ethington, in a letter dated February 27, 1992, provided amended responses on behalf of Sparton to requests by the Navy for information. The letter included numerous Sparton documents as attachments in response to the Navy's request. D95.1. The February 27 letter explained that "[a] thorough search has failed to locate any written material which is approximately contemporaneous with the ECP 465-2 and which provides a description of the configuration and operating principle of the release plate of the proposal of ECP465-2," and presumed that any records had been destroyed. D95.7. Mr. Ethington attached affidavits of James Widenhofer and Donald Depew as the "best evidence" of the design of the release plate. D95.7. Both the Widenhofer and the Depew affidavits assert that the release plate assembly proposed by the ECP had two sliding latch plates which disengaged from the sonobuoy housing slots in response to the upward motion of the cam, as urged by the float inflation. D95.96-111. In discussing the reduction to practice date of the `120 patent, the February 27 letter stated that, "[a]lthough not necessarily the earliest, there was a reduction to practice at least as early as the test on March 9, 1972, which is reported in Sparton report `Job 7400 - Dual Depth Difar Final Report' by J. Widenhofer dated April 28, 1972...." D95.12; 66.1 & .26 (Apr. 28, 1972, DIFAR Final Report). With regard to the `233 patent, the February 27, 1992, letter stated, "[t]he conception date is believed to be in the period of about August 1971 to October 1971 as evidenced by the documents of Attachments 01, 02, 03, and 04, cited above. The first reduction to practice is believed to be March 9, 1972, as reported in the Widenhofer report of April 28, 1972, Attachment A." D95.12-13; D95.83-.95 (Attachments 01-04); J66.1 & .26.

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Attachments 01, 02, 03 and 04 to the February 27, 1992 letter are, respectively: (1) hand-written sketches and calculations bearing the initials JWW of James W. Widenhofer, dated August 12, 1971 and entitled "DIFAR Release Plate Activation Pressure"; (2) hand-written sketches and calculations bearing the initials JWW of James W. Widenhofer, dated August 13, 1971 and entitled "DIFAR Release Plate Activation Pressure"; (3) hand-written sketches and calculations bearing the initials JWW of James W. Widenhofer, dated October 13, 1971 and entitled "DIFAR Release Plate Bending Moment Considerations"; and (4) hand-written sketches and calculations bearing the initials JWW of James W. Widenhofer, dated October 14, 1971 and entitled "DIFAR Release Plate Bending Moment Revision." D95.4-.5 (Attachments 01-04 were found in Widenhofer's personal files), D95.83-.95.

E.

THE FEDERAL CIRCUIT'S OPINION

In Sparton's appeal of this court's 2003 Opinion, the Court of Appeals for the Federal Circuit adopted the following facts relevant to the issue then on appeal and to the license issue presently before the court: On March 17, 1971, Sparton submitted an Engineering Change Proposal ("ECP") 0465-2 to the Navy under its existing contract, proposing to incorporate dual depth operating capability into the existing SSQ-53 DIFAR sonobuoy by modifying the design to incorporate an inverse deployment system. The sonobuoy device described in the ECP included a multi-piece release plate for either retaining or deploying the sonobuoy internal components within or from the sonobuoy housing. However, shortly after the ECP was issued, Sparton developed, and later tested, a sonobuoy having a single-piece release plate. This single-piece release plate performed better than previous release plates and was ultimately used in the modified SSQ-53s Sparton delivered to the Navy under the contract. On March 29, 1973, Sparton filed a patent application relating to a dual depth sonobuoy design. The `120 patent issued as a result and is directed to a

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sonobuoy deployment system. Sparton then filed a divisional application resulting in the `233 patent, which is drawn to a sonobuoy release plate. Both patents contain claim limitations drawn to a single piece release plate for a sonobuoy. 399 F.3d at 1323. And the Federal Circuit further held that the patented invention had not yet been conceived when the alleged offer for sale took place. "Plaintiff asserts that conception of the patented release plate did not occur until after Mod. 4 was adopted, and this fact is not disputed by Defendant for purposes of summary judgment." 399 F.3d at 1325 (quoting 57 Fed. Cl. at 468).

II.

THE UNITED STATES HAD A LAWFUL RIGHT TO USE THE CLAIMED INVENTIONS This Court only has jurisdiction where "an invention described in and covered by a patent

... 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." 28 U.S.C. 1498 (emphasis added). Accordingly, where the Government obtains a right to use an invention by virtue of contract or other agreement, this court lacks jurisdiction over a claim for compensation. Roberts Dairy Co. v. United States, 530 F.2d 1342, 1359-60 (1976) ("a suit against the United States ... under 28 U.S.C. 1498 is only appropriate when the alleged infringement is accomplished by the United States or a United States contractor who does not have a license to practice the invention"). At issue in this case is whether a "patent rights clause" is incorporated by operation of law in Mod 4 to the `-0465 contract because Mod 4 changed the nature of the contract from one for supplies to one for research and development.

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A.

UNDER THE CHRISTIAN DOCTRINE, MANDATORY CLAUSES ARE INCORPORATED BY OPERATION OF LAW

The Christian doctrine holds that a "mandatory contract clause that expresses a significant or deeply ingrained strand of public procurement policy is considered to be included in a contract by operation of law." S.J. Amoroso Const. Co. v. United States, 12 F.3d 1072, 1075 (Fed. Cir. 1993); G. L. Christian & Assoc. v. United States, 312 F.2d 418, 426-27 (Ct. Cl. 1963), aff'd on reh'g, 320 F.2d 345 (1963). The policy may be statutory or administrative. Christian, 312 F.2d at 351 ("[i]t was important then, and it is important now, that procurement policies set by higher authority not be avoided or evaded (deliberately or negligently) by lesser officials, or by a concert of contractor and contracting officer"); General Eng'g & Mach. Works v. O'Keefe, 991 F.2d 775, 779 (Fed. Cir. 1993) ("[t]here is a [] need to protect the significant policies of superior administrators from sapping by subordinates"). The basis for the doctrine is that the government can be neither estopped nor bound where its agents act beyond their authority. Amoroso Const., 12 F.3d at 1075 (citing Federal Crop Ins. Corp. v Merrill, 332 U.S. 380, 384 (1947); Yosemite Park & Curry Co. v. United States, 582 F.2d 552, 558 (Ct. Cl. 1978); and Porter v. United States, 496 F.2d 583, 590 (Ct. Cl. 1974)). Where an agent is required to include a clause but fails to do so, whether through neglect or malfeasance, the agent is acting beyond the agent's authority. Amoroso Const., 12 F.3d at 1075.

B.

THE PATENT RIGHTS CLAUSE EXPRESSES A SIGNIFICANT OR DEEPLY INGRAINED STRAND OF PUBLIC PROCUREMENT POLICY

The significance of the patent rights clause to government procurement policy is demonstrated by the promulgation of two Presidential policy statements in 1963 and 1971.

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President Kennedy's "Memorandum of October 10, 1963 [Government Patent Policy]," 28 Fed. Reg. 10943-10946 (Oct. 12, 1963) (the 1963 Policy Statement), established the patent policy which was in effect at the time the contract was issued. The policy established in the 1963 Policy Statement was subsequently incorporated in the Armed Services Procurement Regulations (ASPR). Compare 1963 Policy Statement, Policy 1 & 4 with 32 C.F.R. 9.107-1 (1969). Subsequently, President Nixon revised and reissued that policy in the "Memorandum of August 23, 1971, Government Patent Policy," 36 Fed. Reg. 16887-16892 (Aug. 23, 1971) (the 1971 Policy Statement). Appendix B. As with the 1963 Policy Statement, the 1971 Policy Statement was subsequently incorporated into the ASPR. Compare 1971 Policy Statement, Policy, 1 & 4 with 32 C.F.R. 9.107-1 (1971). That two Presidents saw fit to insure that a uniform patent policy applied to all government agencies makes clear that the policy was viewed as being important. Indeed, both the 1963 Policy Statement and the 1971 Policy Statement expressly state the significance of the policy to insure a uniform treatment of rights made under government contracts. Appendix A at A2, 28 Fed. Reg. at 10943 ("there is need for greater consistency in agency practices in order to further the governmental and public interests in promoting the utilization of federally financed inventions"); Appendix B at A9 G, 36 Fed. Reg. at 16889 ("[t]he prudent administration of Government research and development calls for a Government-wide policy on the disposition of inventions made under Government contracts reflecting common principles and objectives"). Both policy statements required the agency to retain at least a royalty free license in any invention made "in the course of or under" any contract "where a purpose of the contract is the conduct of experimental, developmental or research work." 1963 Policy Statement, Appendix A

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at A2-5, 28 Fed. Reg. at 10943-46; 1971 Policy Statement, Appendix B at A9-12, 36 Fed. Reg. at 16889-892. Thus, although exact division of rights could vary to some degree, the policy statements always provided that the government would have at least a license in inventions made in the course of or under government research and development contracts. The policy expressed in these statements meets the requirement of the Christian Doctrine that the policy express a significant or deeply ingrained strand of public procurement policy.

C.

THE PATENT RIGHTS CLAUSE WAS A MANDATORY CLAUSE

A patent rights clause was a mandatory clause in contracts for research and development in the 1969-1972 time frame. At that time, military contracts were governed by the Armed Services Procurement Regulation (ASPR), a predecessor of the Federal Acquisition Regulation. The pertinent provisions of which are in ASPR sections 9.107-3, -4, and -5. Two versions of the ASPR provisions were in force during the relevant time period. The first was in force from 1968 and remained in force until amended in 1970. 32 C.F.R. 9.107-1 to -5 (1969). The second version became effective in 1970, and remained in force during the remainder of the relevant period. 32 C.F.R. 9.107-1 to -5 (1971). The former was included in the ASPR when the `-0465 contract was awarded; the second when Mod 4 was awarded. The 1969 and 1971 versions, however, are substantially the same for purposes of this discussion. Compare 32 C.F.R. 9.107-1 to -5(1969) with 32 C.F.R. 9.107-1 to -5 (1971). For purposes of the regulations, a "contract" is defined as "any actual or proposed contract, agreement, ... or other arrangement ... entered into with or for the benefit of the Government where a purpose of the contract is the conduct of experimental, developmental or

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research work." 32 C.F.R. 9.107-2(c)(3) (1969); 32 C.F.R. 9.107-2(c)(3) (1971). Further, "made" in relation to an invention, is defined as "the conception or first reduction to practice of such invention in the course of or under the contract." 32 C.F.R. 9.107-2(c)(4)(1969); 32 C.F.R. 9.107-2(c)(4)(1971). The ASPR required the inclusion of a clause granting the Government at least a royalty free license to make and use the invention (hereinafter a "patent rights clause") in "research and development" contracts. 32 C.F.R. 9.107-3 & -5 (1969); 32 C.F.R. 9.107-3 & -5 (1971). The regulation defines three categories of procurement situations that may