In the United States Court of Federal Claims

No. 12-85 C

Filed: November 30, 2016

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ADVANCED AEROSPACE *

TECHNOLOGIES, INC., *

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Plaintiff, *

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v. *

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THE UNITED STATES, *

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Defendant, *

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and *

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THE BOEING COMPANY, *

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and *

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INSITU, INC., *

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Third-Party Defendants. *

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Craig S. King, Arent Fox LLP, Washington, D.C., Counsel for Plaintiff.

David A. Foley, Jr., United States Department of Justice, Civil Division, Washington, D.C., 

Counsel for the Government.

Scott M. McCaleb, Wiley Rein, LLP, Washington, D.C., Counsel for Third-Party Defendants.

MEMORANDUM OPINION AND ORDER DENYING THE GOVERNMENT’S

MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION

BRADEN, Judge.

28 U.S.C. § 1498(a) (Jurisdiction 

Over Patent Claims Against The 

United States);

31 U.S.C. § 3727 (Assignment Of 

Claims Act);

35 U.S.C. § 120 (Benefit Of Earlier 

Filing Date In The United States);

35 U.S.C. § 202 (Disposition Of 

Rights);

41 U.S.C. § 7104(b)(4) (Contractor’s 

Right Of Appeal From Decision 

By Contracting Officer);

Federal Acquisition Regulation 

52.227-11 (Patent Rights—

Ownership By The Contractor);

RCFC 12(b)(1) (Subject Matter 

Jurisdiction).
2

I. RELEVANT FACTS.1

In mid-1997, William Randall McDonnell undertook to develop a solution to problems 

with traditional systems of launching and recovering unmanned aerial vehicles (“UAV”).

“[N]amely, that UAVs were being arrested using a net, and impact with the net damaged the 

UAVs.” Pl. App’x at PA 2–3. Mr. McDonnell’s solution “involved hanging a line and engaging 

the line with a wing and a hook” of a UAV. Pl. App’x at PA 2. 

On October 19, 1997, Mr. McDonnell, and his “friend and colleague,” Charlie Baker, 

“performed a [backyard] demonstration of [a] recovery system during which the UAV successfully 

engaged the vertical line” and was recovered. Pl. App’x at PA 4. In March 1999, other successful 

demonstrations were performed by Mr. McDonnell. Pl. App’x at PA 5–6. 

On July 23, 1999, Mr. McDonnell filed U.S. Provisional Patent Application No.

60/145,286 (“the ’286 patent application”) that resulted in the issuance of five patents: U.S. Patent 

Nos. 6,874,729 (“the ’729 patent”); 7,097,137 (“the ’137 patent”); 8,167,242 (“the ’242 patent”); 

8,517,306 (“the ’306 patent”); and 8,567,718 (“the ’718 patent”) (collectively “the AATI patents”). 

Am. Compl. ¶ 25. Each AATI patent bears the title: “Launch and Recovery System for Unmanned 

Aerial Vehicles.” Am. Compl. at 1–2.

The ’286 patent application discloses “methods and mechanisms required to launch and 

retrieve aircraft.” Pl. App’x at PA 183. The ’286 application also discloses a “propeller guard”

and a “latching mechanism,” but did not disclose a propeller guard mounted with a latching 

mechanism. Gov’t App’x at GA 66; see also Pl. App’x at PA 190. On July 24, 2000, however, 

AATI filed a related Patent Cooperation Treaty Application, No. PCT/US00/20099 (“the PCT 

application),” that did disclose a propeller guard mounted with a latching mechanism. Gov’t

App’x at GA 296. 

In the summer of 1999, Mr. McDonnell approached the United States Coast Guard (“Coast 

Guard”) to market his “launch and recovery systems.” Gov’t App’x at GA 18–20 (3/4/16

McDonnell Dep.); see also Pl. App’x at PA 6. On November 5, 1999, AATI was awarded a 

contract by the Coast Guard to demonstrate the launch system (Contract No. N00178-00-M-0069) 

(“the Launch Contract”). Gov’t App’x at GA 318–26; see also Pl. App’x at PA 6. On December 

10, 1999, AATI submitted a proposal to the Coast Guard to demonstrate an “improved” recovery 

system. Gov’t App’x at GA 106; see also Pl. App’x at PA 42–54. 

On February 24, 2000, a successful demonstration of AATI’s launch system took place at 

BAI Aerosystems, Inc.’s (“BAI”) Ragged Island test facility. Gov’t App’x at GA 129; see also

Pl. App’x at PA 6. 

On May 23, 2000, AATI informed the Coast Guard that “a patent has been filed for this 

launch and recovery approach.” Gov’t App’x at GA 89; see also Pl. App’x at PA 8. Nevertheless, 

on June 28, 2000, the Coast Guard entered into Contract No. N00178-00-M-9014 (“the Recovery 

 

1 The relevant facts recited herein are derived from: the December 11, 2013 Third Amended 

Complaint (“Am. Compl.”); the Government’s Appendix to the April 11, 2016 Motion To Dismiss 

For Lack of Jurisdiction (“Gov’t App’x”); and the Plaintiff’s Appendix to the June 2, 2016 

Opposition To Motion To Dismiss (“Pl. App’x”). 
3

Contract”) with AATI, that required AATI to perform ten demonstrations of an “improved”

recovery system. Pl. App’x at PA 8–9. In turn, Mr. McDonnell was paid $45,000 by the United 

States Navy, on behalf of the Coast Guard. Gov’t App’x at GA 31–32. Of that amount, $6,000 

was designated for the design, fabrication, and installation of a propeller guard mounted with a 

latching mechanism. Gov’t App’x at GA 31–32. The Recovery Contract, however, did not

incorporate or reference Federal Acquisition Regulation § 52.227-11 or contain a “Patent Rights 

clause.”

2

 Gov’t App’x at GA 29–30. 

On October 13, 2000, prior to demonstrating the “improved” recovery system for the Coast 

Guard, Mr. McDonnell successfully tested a recovery system having a propeller guard mounted 

with a latching mechanism at BAI’s facilities in Easton, Maryland, using a BAI-owned Exdrone.3 

Pl. App’x at PA 85. 

On October 23, 25, and 27, 2000, AATI demonstrated a recovery system having a propeller 

guard mounted with a latching mechanism for the Coast Guard. Pl. App’x at PA 8. Although the 

Recovery Contract required ten demonstrations, the Coast Guard decided to cease demonstrations,

because several UAVs were severely damaged during the demonstrations. Pl. App’x at PA 8–9. 

Thereafter, a Coast Guard Commander prepared a draft report evaluating the demonstrations and 

provided it to Mr. McDonnell. Pl. App’x at PA 95–110. This report did not reference ownership

of, or licensing rights to, the propeller guard mounted with a latching mechanism that was 

demonstrated by AATI to the Coast Guard. Pl. App’x at PA 95–110.

More than fifteen years later, on March 29, 2016, a Contracting Officer for the Naval 

Surface Warfare Center Dahlgren Division (“NSWCDD”) sent a letter to AATI demanding title to 

the “inventions disclosed in AATI’s PCT/US/2009 Application; U.S. Patent Nos. 6,874,729; 

7,097,137; 8,517,306; 8,167,242; 8,567,718; and 8,864,069; and U.S. Patent Application Serial 

No. 14/518,348,” pursuant to 35 U.S.C. § 2025and Federal Acquisition Regulation § 52.227-11. 

Gov’t App’x at GA 228–33. 

II. PROCEDURAL HISTORY.

On February 8, 2012, AATI filed a Complaint in the United States Court of Federal Claims 

alleging that Insitu, Inc. (“Insitu”) and the Boeing Company (“Boeing”)6infringed, with the 

Government’s authorization and consent, the ’729 and ’137 patents, pursuant to 28 U.S.C. 

§ 1498(a). Am. Compl. at 1–2.

The procedural history of this case previously was discussed in the court’s July 29, 2015 

Memorandum Opinion And Order Construing Certain Claims Of United States Patent No. 

6,874,729, United States Patent No. 7,097,137, United States Patent No. 8,167,242, United States 

Patent No. 8,517,306, And United States Patent No. 8,567,718. See Advanced Aerospace 

Technologies, Inc. v. United States, 122 Fed. Cl. 445, 449–52 (2015). Therein, the court construed

 

2 The relevant portions of FAR § 52.227-11 are provided in the attached Court Appendix.

3 The Exdrone is an unmanned aerial vehicle manufactured by BAI.

5 The relevant portions of 35 U.S.C. § 202 are provided in the attached Court Appendix.

6 These parties are collectively referred to herein as “the Third-Party Defendants.” 
4

several potentially relevant terms. For example, “fixed hook” was construed to mean “a hook 

placed in a position remaining constant.” Id. at 466. “Obstruction” was construed to mean “an 

object requiring added force to be moved.” Id. at 470. And, “Sensor” was construed to mean “a 

device that responds to a stimulus (such as heat, light, sound, pressure, signals, magnetism, or a 

particular motion) and transmits a resulting impulse.” Id. at 470, 480.

On November 24, 2015, the court issued a Memorandum Opinion And Order Ruling On 

Indefiniteness Asserted Regarding Certain Claim Terms In United States Patent No. 6,874,729, 

United States Patent No. 7,097,137, United States Patent No. 8,167,242, United States Patent No. 

8,517,306. See Advanced Aerospace Technologies, Inc. v. United States, 124 Fed. Cl. 282, 290–

308 (2015). Therein, the court made several potentially relevant rulings. For example, with 

respect to the ’729 patent, the court determined that the term “sensor” was not indefinite, but that 

the terms “near the point of engagement” and “outboard portion” were indefinite. Id. at 290–94. 

With respect to the ’137 patent, the court determined that the terms “reasonably secure,” “smooth

continuation,” “substantially arrested,” and “sufficient amount” were not indefinite. Id. at 

295–98. With respect to ’242 patent, the court determined that the term “the inflexible support 

structure being construed” was not indefinite, but that the term “inboard point” was indefinite. Id. 

at 299–300. With respect to the ’306 patent, the court determined that the terms “elastic 

deformation,” “absorbs most of the energy,” “generally vertical,” and “generally perpendicular” 

were not indefinite, but that the terms “outboard portion,” “reliably and releasably attach,” and 

“kept clear” were indefinite. Id. 303–08. 

On December 4, 2015, the court convened a telephone status conference and issued a 

Scheduling Order requiring the Government and the Third-Party Defendants to submit an 

invalidity chart and non-infringement contentions by February 1, 2016 and set a trial on 

infringement to commence on April 18, 2016 and a trial on damages to commence on June 13, 

2016. ECF No. 108. 

On February 1, 2016, the Government and the Third-Party Defendants submitted 

Contentions Of Invalidity And Non-Infringement. ECF No. 109. 

On February 9, 2016, the Government filed a Motion To Amend Pleadings, pursuant to 

Rule 15 of the Rules Of The United States Court Of Federal Claims (“RCFC”), to amend its 

December 20, 2013 Answer and plead an additional defense under the Assignment of Claims Act, 

31 U.S.C § 3727. ECF No. 112. 

On February 16, 2016, Plaintiff filed a Motion To Compel Discovery. ECF No. 116. 

On February 22, 2016, the court convened a hearing to resolve outstanding discovery 

disputes. 2/22/16 TR 1–90. During the hearing, the Third-Party Defendants asserted that certain 

documents were subject to attorney-client privilege and the court ordered submission of these 

documents for in camera review. 2/22/16 TR 30–31. The court also granted-in-part and deniedin-part Plaintiff’s February 16, 2016 Motion To Compel. 2/22/16 TR 34–35, 45–46, 49, 50–51, 

59, 61–73.

On March 10, 2016, the court convened a telephone status conference in preparation for

the upcoming trial, at which the Government informed the court that new information was 

identified that implicated the court’s jurisdiction. ECF No. 135. 
5

On March 11, 2016, the court issued a Memorandum Opinion And Order Ruling On 

Attorney-Client Privilege Documents, Suspending Discovery, And Canceling Pending Trial Dates. 

See Advanced Aerospace Technologies, Inc., v. United States, 125 Fed. Cl. 581 (2016). Therein, 

the court determined that, in light of the Government’s March 10, 2016 representation that it 

intended to file a Motion To Dismiss, the court ordered the suspension of the production of all 

privileged documents, suspension of all pending discovery (including outstanding depositions), 

and canceled the infringement and damages trial dates. Id. at 586. In addition, the court denied 

the Government’s February 9, 2016 Motion To Amend Pleadings, without prejudice, and ordered 

the Government to file a Motion To Dismiss by April 11, 2016. Id. at 586.7 

On April 11, 2016, the Government filed a Motion To Dismiss (“Gov’t Mot.”), pursuant 

to RCFC 12(b)(1). On June 2, 2016, AATI filed a Response (“Pl. Resp.”). On August 1, 2016, 

the Government filed a Reply (“Gov’t Reply”). 

On September 6, 2016, AATI filed a Motion For Leave to file additional declarations in 

response to the Government’s April 11, 2016 Motion To Dismiss. ECF No. 142. These 

declarations were attached to AATI’s June 2, 2016 Response, but did not include the attestation 

clause required by 28 U.S.C. § 1746.8 ECF No. 142. On September 23, 2016, the Government 

filed a Response stating that it was not opposed to AATI’s motion. ECF No. 143. On October 13, 

2016, the court issued an order granting AATI leave to file the additional declarations. ECF No. 

144. 

On November 16, 2016, the court convened an oral argument on the Government’s April 

11, 2016 Motion To Dismiss. 11/16/16 TR 1–88.

On November 18, 2016 AATI provided the court and the Government with copies of a 

video depicting Mr. McDonnell’s October 19, 1997 and March 1999 demonstrations of the 

recovery system.

III. DISCUSSION.

A. Jurisdiction.

The United States Court of Federal Claims has jurisdiction to adjudicate claims that allege 

“an invention described in and covered by a patent of the United States 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 . . . [seeking] recovery of . . . reasonable and entire compensation for such 

use and manufacture.” 28 U.S.C. § 1498(a).

 

7 The court also ruled that certain Third-Party Defendant documents requested by Plaintiff 

were subject to the attorney-client privilege. See Advanced Aerospace, 125 Fed. Cl. at 581–586. 

8

28 U.S.C. § 1746 provides that sworn declarations should include an attestation in 

substantially the following form: “I declare (or certify, verify, or state) under penalty of perjury 

under the laws of the United States of America that the foregoing is true and correct.” 28 U.S.C. 

§ 1746(2).
6

As a threshold matter, the court must consider jurisdiction before reaching the substantive 

merits of a case. See Gonzalez v. Thaler, 132 S. Ct. 641, 648 (2012) (“When a requirement goes 

to subject-matter jurisdiction, courts are obligated to consider sua sponte issues that the parties 

have disclaimed or have not presented.”). When considering a motion to dismiss for lack of subject

matter jurisdiction, the court must take the facts alleged in the complaint as true. See Erickson 

v. Pardus, 551 U.S. 89, 93–94 (2007). The court may consider evidence beyond the pleadings, 

however, when the motion to dismiss challenges the jurisdictional facts alleged in the complaint. 

See Moyer v. United States, 190 F.3d 1314, 1318 (Fed. Cir. 1999). If the court determines that it 

does not have subject-matter jurisdiction, the court must dismiss the complaint. See RCFC 

12(b)(1).

B. Standard of Review.

The Government’s April 11, 2016 Motion To Dismiss challenges the court’s jurisdiction,

pursuant to Rule 12(b)(1). A challenge to the United States Court of Federal Claims’ “general 

power to adjudicate in specific areas of substantive law . . . is properly raised by a [Rule] 12(b)(1) 

motion.” Palmer v. United States, 168 F.3d 1310, 1313 (Fed. Cir. 1999); see also RCFC 12(b)(1) 

(allowing a party to assert, by motion, “lack of subject matter jurisdiction”). When considering 

whether to dismiss an action for lack of subject matter jurisdiction, the court is “obligated to 

assume all factual allegations [of the complaint] to be true and to draw all reasonable inferences 

in plaintiff's favor.” Henke v. United States, 60 F.3d 795, 797 (Fed. Cir. 1995).

The plaintiff bears the burden of proving, by a preponderance of the evidence, that the court 

possesses jurisdiction. See McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936) 

(“[The plaintiff] must allege in his pleading the facts essential to show jurisdiction.”); see also 

Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988) ([The plaintiff] 

bears the burden of establishing subject matter jurisdiction by a preponderance of the evidence.”). 

Therefore, the plaintiff cannot rely solely on allegations in the complaint, but also must bring forth 

relevant, adequate proof to establish jurisdiction. See Reynolds, 846 F.3d at 748 (“[I]t was 

incumbent upon [the plaintiff] to come forward with evidence establishing the court’s 

jurisdiction.”).

C. Whether The Court Has Jurisdiction To Adjudicate The Claims Alleged In 

The December 11, 2013 Third Amended Complaint.

1. The Government’s Argument.

In relevant part, Section 1498(a) provides that:

This section shall not confer a right of action on any patentee or any assignee of 

such patentee with respect to any invention discovered or invented by a person 

while in the employment or service of the United States, where the invention was 

related to the official functions of the employee, in cases in which such functions 
7

included research and development, or in the making of which Government time, 

materials or facilities were used.

28 U.S.C. § 1498(a) (emphasis added).

The Government argues that the “employment or service” exception to Section 1498(a) is 

a “limitation on the United States’ waiver of sovereign immunity.” Gov’t Mot. at 12–13. The 

words “employment or service” require that: the invention was made “(1) while in the 

‘employment or service’ of the United States and (2)(a) as part of the official functions of the 

employee or (b) in whose preparation government ‘time, material[s], or facilities’ were used.” 

Gov’t Mot. at 14 (quoting Walton v. United States, 551 F.3d 1367, 1369 (Fed. Cir. 2009)). 

Consequently, “the only question that must be answered is whether Mr. McDonnell’s work under 

the Recovery Contract was ‘in the employment or service of the United States.’” Gov’t Mot. at 

14 (quoting 28 U.S.C. § 1498(a)). 

The Government adds that the “invention” at issue is the PCT application “as a whole,” 

although only portions of that application describe a propeller guard mounted with a latching 

mechanism and were “discovered or invented” during performance of the Recovery Contract. 

Gov’t Mot. at 14, 32–34. In addition, the filing date of the ’286 application is inapplicable, because 

only the actual reduction to practice is relevant in establishing whether Mr. McDonnell’s 

inventions were “discovered or invented” during performance of the Recovery Contract. 11/16/16 

TR 82. 

Therefore, after reviewing the “the plain statutory language, the legislative history, and the 

case law,” the Government concludes that Mr. McDonnell was “in the . . . service of the United 

States,” because “AATI’s and Mr. McDonnell’s work was overseen by the Coast Guard, and AATI 

was paid for the work by the United States.” Gov’t Mot. at 18–19. In addition, Government “time, 

material[s], or facilities” were used, as Mr. McDonnell admitted, i.e., “the drones used for the 

Coast Guard research were ‘government property.’” Gov’t Mot. at 14 (citing 3/4/16 McDonnell

Dep.). Therefore, “the [c]ourt must find that sovereign immunity has not been waived under 28 

U.S.C. § 1498(a) and that the [c]ourt lacks jurisdiction to hear plaintiff’s claims.” Gov’t Mot. at 

20. 

Finally, the NSWCDD Contracting Officer’s March 29, 2016 Letter demanding title to the 

asserted patents, pursuant to 35 U.S.C. § 202 and Federal Acquisition Regulation 52.227-11, “will 

void AATI’s title in the asserted patents if it becomes final.” Gov’t Mot. at 20. “If title is voided, 

AATI will lack standing to assert a patent infringement claim.” Gov’t Mot. at 20. For this reason, 

the court should stay further proceedings in this case until the Contracting Officer decides whether 

to void AATI’s title to the patents-in-suit. Gov’t Mot. at 20.

2. Plaintiff’s Response.

AATI responds that “there is no merit to the Government’s effort to lump together as a 

single ‘invention’ the ‘net’ recovery system and the recovery system at issue here.” Pl. Resp. at 

3. And, there is “no basis in law to combine the two recovery systems together as a ‘single 

invention.’” Pl. Resp. at 3. Instead, “each claim under a patent is considered a separate ‘invention’ 

for the purposes of examining jurisdiction under 28 U.S.C. § 1498.” Pl. Resp. at 19. 
8

In addition, none of the “inventions” described in the asserted claims were “‘discovered or 

invented’ by a person while in the employment or service of the United States.” Pl. Resp. at 19. 

As the Government admits, “the [Recovery] contract involved only a ‘drone recovery using a 

parasail and a propeller guard with latch on the guard.’” Pl. Resp. at 21. Mr. McDonnell, however,

“‘discovered or invented’ none of the fourteen inventions at issue (or any other inventions) during 

the period of time [that] the [G]overnment contends he was in the employment or service of the 

Government.” Pl. Resp. at 2.

Finally, the court should not stay this case pending the Contracting Officer’s final decision, 

because that decision will not be binding on the court. Id. at 39–40. 

3. The Government’s Reply.

The Government replies that “AATI’s opposition to the motion to dismiss boils down to a 

single issue—what is an ‘invention’ for purposes of the jurisdictional limitations on Section

1498(a)?” Gov’t Reply at 1. In this case, there is a “‘close and umbilical relationship’ between 

the Coast Guard device and the asserted claims.” Gov’t Reply at 4 (citing Technical Dev. 

Corp. v. United States, 597 F.2d 733 (Ct. Cl. 1979)). And, “the plain statutory language, the 

legislative history, case law, and the asserted patents demonstrate that, because AATI was in the 

service of the Government when it reduced to practice the basic concept underlying the asserted 

patents, the court does not have jurisdiction to adjudicate AATI’s claims that the Government 

infringed the patents at issue.” Gov’t Reply at 1. 

In addition, the Government argues that the court has jurisdiction to adjudicate a 

Contracting Officer’s decision, only if the decision is final. Gov’t Reply at 20 (“[T]he standard of 

review does not give [the court] leave to ignore the tried-and-true jurisdictional prerequisite of a 

final decision.”). Proceeding to trial before the decision is final “risks wasting resources by forcing

the parties to litigate patents that the government might ultimately own.” Gov’t Reply at 20. For 

these reasons, the court should stay the case pending the Contracting Officer’s final decision. 

Gov’t Reply at 20. 

4. The Court’s Resolution.

The United States Court of Federal Claims has jurisdiction to adjudicate patent 

infringement claims against the United States. See 28 U.S.C. § 1498 (2006). Section 1498(a) 

provides: 

Whenever an invention described in and covered by a patent of the United States 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, the owner’s remedy shall be 

by action against the United States in the United States Court of Federal Claims for 

the recovery of his reasonable and entire compensation for such use and 

manufacture.

28 U.S.C. § 1498(a) (emphasis added).

It is well settled that “each claim of a patent is a separate and distinct invention.” See

Gould, Inc. v. United States, 579 F.2d 571, 576 (Ct. Cl. 1978) (“It is also important to keep in mind 
9

that each claim of a patent is a separate and distinct invention. It is thus possible to discuss and 

deal with one or more of the claims independently and distinctly from the entire group of patent 

claims.”). As such, the court’s jurisdiction under Section 1498(a) must be evaluated in light of the 

scope of each asserted claim individually.

9

Id. The claims asserted as infringed in this litigation 

are directed either to a generic “recovery system”

10 or a recovery system requiring a wing mounted 

with a latching mechanism.11 No asserted claim, however, describes a propeller guard mounted 

with a latching mechanism. Simply put, this case concerns alleged infringement of claims about 

an apple, but the Government’s argument is that the court does not have jurisdiction to adjudicate 

infringement claims about an orange. 

In addition, in this case, each of the asserted claims is recited in a patent that claims priority 

to the ’286 patent application. Am. Compl. at 29, 66, 103 and 171. The ’286 patent application

describes “methods and mechanisms required to launch and retrieve aircraft.” Pl. App. at PA 183. 

Among other embodiments, the ’286 patent application describes a recovery system in which the 

wing of a UAV is mounted with a latching mechanism (i.e., hook 26 and spring loaded latch 28). 

Pl. App. at PA 190, 200. In light of disclosure of the ’286 patent application and scope of the 

subject matter of the asserted claims, without a finding to the contrary, the asserted claims are 

entitled to the filing date of the ’286 patent application (July 23, 1999). See 35 U.S.C. § 120.

12

The parties agree that Mr. McDonnell filed the ’286 patent application before signing either 

the Launch Contract or the Recovery Contract. Am. Compl. at 1; see also Gov’t Mot. at 3–5. 

Therefore, the asserted claims are entitled to a July 23, 1999 filing date that predates both the

November 5, 1999 Launch Contract and the June 28, 2000 Recovery Contract. And, the Court of 

Claims has held that, when claims are entitled to a filing date that predates Government 

“employment or service,” “subsequent employment history is irrelevant and the bar expressed in 

28 U.S.C. § 1498 is inapplicable.” See Leesona Corp. v. U.S., 530 F.2d 896, 903 (Ct. Cl. 1976)

(“[The Government’s] contention that 28 U.S.C. § 1498 bars this suit, because Dr. Tanner was an 

employee of the United States at the time he executed the continuation-in-part application is 

without merit. Dr. Tanner was neither employed by nor in the service of defendant either when 

the invention of claims 4 and 7 was made in 1958 or when the original application was filed in 

1960. Since the claims are entitled to the 1960 filing date, his subsequent employment history is 

irrelevant and the bar expressed in 28 U.S.C. § 1498 is inapplicable.”). In this case, since the ’286

 

9 Plaintiff asserts that the following claims were infringed: claim 45 of the ’729 patent; 

claims 1, 2, 18, 25 and 30 of the ’137 patent; claims 2, 13, 15 and 19 of the ’242 patent; and claims 

2, 3, 4 and 5 of the ’718 patent against the Government. Pl. Resp. at 20. 

10 See, e.g., claim 45 of the ’729 patent (Am. Compl. Ex. A at 63); and claim 2 of the ’242

patent, (Am. Compl. Ex. C. at 134).

11 See, e.g., claim 30 of the ’137 patent that recites “wherein the device adapted for 

intercepting the line comprises a hook on the wing of the flying object.” Am. Compl. Ex. B. at 

98–99; see also claims 1, 2, 18 and 25 of the ’137 patent (Am. Compl. Ex. B. at 98); claims 13, 15 

and 19 of the ’242 patent (Am. Compl. Ex. C. at 135); and claims 2, 3, 4 and 5 of the ’718 patent

(Am. Compl. Ex. E. at 202).

12 The relevant portions of 35 U.S.C. § 120 are provided in the attached Court Appendix.
10

patent application predates both the Launch Contract and the Recovery Contract the “employment 

or service” bar of Section 1498(a) is inapplicable.

Nevertheless, the Government insists that the filing date of the ’286 patent application is 

irrelevant. In Pilley v. United States, 74 Fed. Cl. 489 (2006), the Government made similar 

contentions, arguing “that while constructive reduction to practice by the filing of a patent 

application may be relevant for the purpose of determining priority of invention, filing a patent 

application is immaterial to determination of the time of first actual reduction to practice of an 

invention under the patent rights clause.” Id. at 497–98 (citing Hazeltine Corp. v. United States, 

820 F.2d 1190, 1196 (Fed. Cir. 1987). The Pilley court also determined that, “[i]n the context of 

a patent rights clause in a government contract, ‘reduction to practice occurs when it is established 

that the invention will perform its intended function beyond a probability of failure,’ so that 

whatever ‘minor adjustments’ are thereafter required may be considered mere ‘perfecting 

modifications.’” Id. (emphasis added). 

In Pilley, however, the government contract at issue “incorporate[d] by reference FAR 

§ 52.227–11.” Id. at 494–95. As such, the court limited its holding to “the context of a patent 

rights clause in a government contract.” Id. at 497–98 (quoting Hazeltine Corp., 820 F.2d at 1196). 

This is consistent with Hazeltine Corp., where the United States Court of Appeals for the Federal 

Circuit’s decision was based on the fact that the government contract at issue included a “Patent 

Rights clause” so the holding was limited to “the context of a patent rights clause in a government 

contract.” Hazeltine Corp. 820 F.2d at 1196. In this case, however, neither the Launch Contract 

nor the Recovery Contract incorporated FAR 52.227-11 or otherwise included a “Patent Rights 

clause.”13 Consequently, Pilley and Hazeltine Corp. do not apply in this case. Moreover, the 

Government’s interactions with Mr. McDonnell prior to, during and after performance of the 

Recovery Contract show that the Government had absolutely no interest in pursuing any patent 

rights in Mr. McDonnell’s inventions. Pl. App’x at PA12, PA86, PA95, PA123.

Nevertheless, even if FAR 52.227-11 were to apply, the court finds, for purposes of this 

motion, that Mr. McDonnell actually reduced to practice the inventions disclosed in the asserted 

claims on October 19, 1997,14 before entering into either the November 5, 1999 Launch Contract 

 

13 The Government’s motion concerns only the reduction to practice during performance 

under the Recovery Contract. Gov’t Mot. at 14, 32–34. The Launch Contract, however, also did 

not concern a propeller guard mounted with a latching mechanism and did not incorporate by 

reference FAR 52.227-11. Gov’t App’x at GA 320-323.

14 During the November 16, 2016 oral argument, AATI stated that there was video evidence 

of the October 19, 1997 reduction to practice. 11/16/16 TR 53–54. A review of the video shows 

a “subscale” UAV with a wing mounted with a latching mechanism being successfully recovered. 

This demonstration shows an actual reduction to practice of a UAV recovery system consistent 

with the asserted claims. 

At the oral argument, the Government also asserted that the video does not show actual 

reduction to practice, because the UAV used was a “toy,” i.e., subscale, and not a full sized military

drone. TR 76–81. The asserted claims, however, recite a “flying object,” an “aircraft” and an 

“unmanned aircraft,” not any specific type of UAV. See Claim 45 of the ’729 patent (Am. Compl. 

Ex. A at 63); claims 1, 2, 18, 25 and 30 of the ’137 patent (Am. Compl. Ex. B. at 98-99); claims 
11

or the June 28, 2000 Recovery Contract. Pl. App’x at PA 56. As such, AATI has put forth 

sufficient evidence to establish the court’s jurisdiction in this case. 

The Government’s reliance on the “close and umbilical connection” doctrine also does not 

alter the court’s conclusion. Under that doctrine, the federal government has the right to use, 

royalty-free, “those inventions which have a ‘close [and] umbilical relationship’ to the work and 

research funded by the United States and were crystallized during performance of the federal 

contract.” Technical Dev. Corp. v. United States, 597 F.2d 733, 745–46 (Ct. Cl. 1979) (citing 

Technitrol, Inc. v. United States, 440 F.2d 1362, 1372 (Ct. Cl. 1971)). In Technical Dev. Corp., 

however, the Court of Claims held that the inventions at issue were conceived of or reduced to 

practice during Government “employment or service.” Id. at 749–50. In this case, as discussed 

above, the “inventions” at issue were conceived of and reduced to practice by October 19, 1997, 

prior to both the Launch Contract (November 5, 1999) and the Recovery Contract (June 28, 2000). 

In addition, although Mr. McDonnell’s performance under the Launch Contract and the 

Recovery Contract necessarily required use of technologies disclosed in the ’286 application, the 

Government “contributed nothing at all to that development.” See Leesona Corp., 530 F.2d at

903. In Technitrol, Inc., the Court of Claims considered this issue “by asking what the United 

States (acting for its taxpayers) can fairly be said to have purchased through its sponsorship of the 

contract project.” Technitrol, Inc., 440 F. 2d at 1372. In this case, Mr. McDonnell’s work prior 

to the Launch Contract and the Recovery Contract was privately funded. 11/16/16 TR 64. 

Therefore, it cannot “fairly be said” that the Government “purchased” the “inventions” disclosed 

in the ’286 application. Nor can it be said that the public “[h]aving borne the expense” of Mr. 

McDonnell’s efforts, “is entitled to enjoy the fruits without further charge.” See Technitrol, Inc.

440 F. 2d at 1372. Even assuming that Mr. McDonnell was in the “service of the United States,”

the Government proffered no evidence that establishes that the wing mounted with a latching 

mechanism was “discovered or invented . . . while [he was] in the . . . service of the United States,” 

as required by Section 1498(a). See Technical Development Corp., 597 F.2d at 746. 

Finally, 41 U.S.C. § 7104(b)(1) provides that “in lieu of appealing the decision of a 

contracting officer . . . to an agency board, a contractor may bring an action directly on the claim 

in the United States Court of Federal Claims, notwithstanding any contract provision, regulation, 

or rule of law to the contrary.” 41 U.S.C. § 7104(b)(1) (emphasis added). In light of the nondeferential standard of review and congressional authorization of the United States Court of 

Federal Claims to adjudicate AATI’s patent infringement claims, the court declines to exercise its 

discretion to stay these proceedings again. 

IV. CONCLUSION.

For the reasons discussed herein, the Government’s April 11, 2016 Motion To Dismiss is 

denied. 

 

2, 13, 15 and 19 of the ’242 patent (Am. Compl. Ex. C. at 135); and claims 2, 3, 4 and 5 of the 

’718 patent (Am. Compl. Ex. E. at 202). Therefore, the fact that a military UAV was not used in 

reducing Mr. McDonnell’s invention to practice is not relevant or dispositive. 
12

IT IS SO ORDERED.

s/ Susan G. Braden

SUSAN G. BRADEN

Judge
i

COURT APPENDIX: 

RELEVANT STATUTORY AND REGULATORY PROVISIONS

Section 120 of the 1952 Patent Act, as amended by the Patent Law Treaties Implementation Act 

of 2012, provides:

An application for patent for an invention disclosed in the manner provided by section 

112(a) (other than the requirement to disclose the best mode) in an application previously 

filed in the United States, or as provided by section 363 or 385, which names an inventor 

or joint inventor in the previously filed application shall have the same effect, as to such 

invention, as though filed on the date of the prior application, if filed before the patenting 

or abandonment of or termination of proceedings on the first application or on an 

application similarly entitled to the benefit of the filing date of the first application and 

if it contains or is amended to contain a specific reference to the earlier filed application. 

No application shall be entitled to the benefit of an earlier filed application under this 

section unless an amendment containing the specific reference to the earlier filed 

application is submitted at such time during the pendency of the application as required 

by the Director. The Director may consider the failure to submit such an amendment 

within that time period as a waiver of any benefit under this section. The Director may 

establish procedures, including the requirement for payment of the fee specified in 

section 41(a)(7), to accept an unintentionally delayed submission of an amendment under 

this section.

35 U.S.C. § 120.

Section 202 of the 1980 Act To Amend The Patent And Trademark Laws, as subsequently 

amended, provides, in relevant part:

(a) Each nonprofit organization or small business firm may, within a reasonable time after 

disclosure as required by paragraph (c)(1) of this section, elect to retain title to any subject 

invention: Provided, however, That a funding agreement may provide otherwise (i) when 

the contractor is not located in the United States or does not have a place of business located 

in the United States or is subject to the control of a foreign government, (ii) in exceptional 

circumstances when it is determined by the agency that restriction or elimination of the 

right to retain title to any subject invention will better promote the policy and objectives of 

this chapter (iii) when it is determined by a Government authority which is authorized by 

statute or Executive order to conduct foreign intelligence or counter-intelligence activities 

that the restriction or elimination of the right to retain title to any subject invention is 

necessary to protect the security of such activities or, (iv) when the funding agreement 

includes the operation of a Government-owned, contractor-operated facility of the 

Department of Energy primarily dedicated to that Department’s naval nuclear propulsion 

or weapons related programs and all funding agreement limitations under this subparagraph 

on the contractor’s right to elect title to a subject invention are limited to inventions 

occurring under the above two programs of the Department of Energy. The rights of the 
ii

nonprofit organization or small business firm shall be subject to the provisions of paragraph 

(c) of this section and the other provisions of this chapter.

(b) 

(1) The rights of the Government under subsection (a) shall not be exercised by a Federal 

agency unless it first determines that at least one of the conditions identified in clauses 

(i) through (iv) of subsection (a) exists. Except in the case of subsection (a)(iii), the 

agency shall file with the Secretary of Commerce, within thirty days after the award of 

the applicable funding agreement, a copy of such determination. In the case of a 

determination under subsection (a)(ii), the statement shall include an analysis justifying 

the determination. In the case of determinations applicable to funding agreements with 

small business firms, copies shall also be sent to the Chief Counsel for Advocacy of the 

Small Business Administration. If the Secretary of Commerce believes that any 

individual determination or pattern of determinations is contrary to the policies and 

objectives of this chapter or otherwise not in conformance with this chapter, the Secretary 

shall so advise the head of the agency concerned and the Administrator of the Office of 

Federal Procurement Policy, and recommend corrective actions.

(2) Whenever the Administrator of the Office of Federal Procurement Policy has 

determined that one or more Federal agencies are utilizing the authority of clause (i) or 

(ii) of subsection (a) of this section in a manner that is contrary to the policies and 

objectives of this chapter, the Administrator is authorized to issue regulations describing 

classes of situations in which agencies may not exercise the authorities of those clauses.

(3) If the contractor believes that a determination is contrary to the policies and 

objectives of this chapter or constitutes an abuse of discretion by the agency, the 

determination shall be subject to section 203(b).

(c) Each funding agreement with a small business firm or nonprofit organization shall 

contain appropriate provisions to effectuate the following:

(1) That the contractor disclose each subject invention to the Federal agency within a 

reasonable time after it becomes known to contractor personnel responsible for the 

administration of patent matters, and that the Federal Government may receive title to 

any subject invention not disclosed to it within such time.

(2) That the contractor make a written election within two years after disclosure to the 

Federal agency (or such additional time as may be approved by the Federal agency) 

whether the contractor will retain title to a subject invention: Provided, That in any case 

where the 1-year period referred to in section 102(b) would end before the end of that 2-

year period, the period for election may be shortened by the Federal agency to a date that 

is not more than sixty days before the end of that 1-year period: And provided further, 

That the Federal Government may receive title to any subject invention in which the 

contractor does not elect to retain rights or fails to elect rights within such times.

(3) That a contractor electing rights in a subject invention agrees to file a patent 

application prior to the expiration of the 1-year period referred to in section 102(b), and 
iii

shall thereafter file corresponding patent applications in other countries in which it 

wishes to retain title within reasonable times, and that the Federal Government may 

receive title to any subject inventions in the United States or other countries in which the 

contractor has not filed patent applications on the subject invention within such times.

(4) With respect to any invention in which the contractor elects rights, the Federal agency 

shall have a nonexclusive, nontransferable, irrevocable, paid-up license to practice or 

have practiced for or on behalf of the United States any subject invention throughout the 

world: Provided, That the funding agreement may provide for such additional rights, 

including the right to assign or have assigned foreign patent rights in the subject 

invention, as are determined by the agency as necessary for meeting the obligations of 

the United States under any treaty, international agreement, arrangement of cooperation, 

memorandum of understanding, or similar arrangement, including military agreement 

relating to weapons development and production.

(5) The right of the Federal agency to require periodic reporting on the utilization or 

efforts at obtaining utilization that are being made by the contractor or his licensees or 

assignees: Provided, That any such information as well as any information on utilization 

or efforts at obtaining utilization obtained as part of a proceeding under section 203 of 

this chapter shall be treated by the Federal agency as commercial and financial 

information obtained from a person and privileged and confidential and not subject to 

disclosure under section 552 of title 5.

(6) An obligation on the part of the contractor, in the event a United States patent 

application is filed by or on its behalf or by any assignee of the contractor, to include 

within the specification of such application and any patent issuing thereon, a statement 

specifying that the invention was made with Government support and that the 

Government has certain rights in the invention.

(7) In the case of a nonprofit organization, (A) a prohibition upon the assignment of 

rights to a subject invention in the United States without the approval of the Federal 

agency, except where such assignment is made to an organization which has as one of its 

primary functions the management of inventions (provided that such assignee shall be 

subject to the same provisions as the contractor); (B) a requirement that the contractor 

share royalties with the inventor; (C) except with respect to a funding agreement for the 

operation of a Government-owned-contractor-operated facility, a requirement that the 

balance of any royalties or income earned by the contractor with respect to subject 

inventions, after payment of expenses (including payments to inventors) incidental to the 

administration of subject inventions, be utilized for the support of scientific research or 

education; (D) a requirement that, except where it is determined to be infeasible 

following a reasonable inquiry, a preference in the licensing of subject inventions shall 

be given to small business firms; and (E) with respect to a funding agreement for the 

operation of a Government-owned-contractor-operated facility, requirements (i) that 

after payment of patenting costs, licensing costs, payments to inventors, and other 

expenses incidental to the administration of subject inventions, 100 percent of the balance 

of any royalties or income earned and retained by the contractor during any fiscal year 

up to an amount equal to 5 percent of the annual budget of the facility, shall be used by 
iv

the contractor for scientific research, development, and education consistent with the 

research and development mission and objectives of the facility, including activities that 

increase the licensing potential of other inventions of the facility; provided that if said 

balance exceeds 5 percent of the annual budget of the facility, that 15 percent of such 

excess shall be paid to the Treasury of the United States and the remaining 85 percent 

shall be used for the same purposes described above in this clause; and (ii) that, to the 

extent it provides the most effective technology transfer, the licensing of subject 

inventions shall be administered by contractor employees on location at the facility.

(8) The requirements of sections 203 and 204 of this chapter.

35 U.S.C. § 202(a)–(c). 

FAR 52.227-11 provides in relevant part:

(a) As used in this clause—

Invention means any invention or discovery that is or may be patentable or otherwise 

protectable under title 35 of the U.S. Code, or any variety of plant that is or may be 

protectable under the Plant Variety Protection Act (7 U.S.C. 2321, et seq.)

Made means—

(1) When used in relation to any invention other than a plant variety, the conception or 

first actual reduction to practice of the invention.

* * *

Subject invention means any invention of the Contractor made in the performance of work 

under this contract.

(b) Contractor’s rights

(1) Ownership. The Contractor may retain ownership of each subject invention 

throughout the world in accordance with the provisions of this clause.

(2) License.

(i) The Contractor shall retain a nonexclusive royalty-free license throughout the 

world in each subject invention to which the Government obtains title, unless the 

Contractor fails to disclose the invention within the times specified in paragraph (c) of 

this clause. The Contractor’s license extends to any domestic subsidiaries and affiliates 

within the corporate structure of which the Contractor is a part, and includes the right 

to grant sublicenses to the extent the Contractor was legally obligated to do so at 

contract award. The license is transferable only with the written approval of the agency, 
v

except when transferred to the successor of that part of the Contractor’s business to 

which the invention pertains.

(ii) The Contractor’s license may be revoked or modified by the agency to the extent 

necessary to achieve expeditious practical application of the subject invention in a 

particular country in accordance with the procedures in FAR 27.302(i)(2) and 27.304–

1(f).

(c) Contractor’s obligations.

(1) The Contractor shall disclose in writing each subject invention to the Contracting 

Officer within 2 months after the inventor discloses it in writing to Contractor personnel 

responsible for patent matters. The disclosure shall identify the inventor(s) and this 

contract under which the subject invention was made. It shall be sufficiently complete in 

technical detail to convey a clear understanding of the subject invention. The disclosure 

shall also identify any publication, on sale (i.e., sale or offer for sale), or public use of 

the subject invention, or whether a manuscript describing the subject invention has been 

submitted for publication and, if so, whether it has been accepted for publication. In 

addition, after disclosure to the agency, the Contractor shall promptly notify the 

Contracting Officer of the acceptance of any manuscript describing the subject invention 

for publication and any on sale or public use.

(2) The Contractor shall elect in writing whether or not to retain ownership of any subject 

invention by notifying the Contracting Officer within 2 years of disclosure to the agency. 

However, in any case where publication, on sale, or public use has initiated the 1–year 

statutory period during which valid patent protection can be obtained in the United States, 

the period for election of title may be shortened by the agency to a date that is no more 

than 60 days prior to the end of the statutory period.

(3) The Contractor shall file either a provisional or a nonprovisional patent application 

or a Plant Variety Protection Application on an elected subject invention within 1 year 

after election. However, in any case where a publication, on sale, or public use has 

initiated the 1–year statutory period during which valid patent protection can be obtained 

in the United States, the Contractor shall file the application prior to the end of that 

statutory period. If the Contractor files a provisional application, it shall file a 

nonprovisional application within 10 months of the filing of the provisional application. 

The Contractor shall file patent applications in additional countries or international patent 

offices within either 10 months of the first filed patent application (whether provisional 

or nonprovisional) or 6 months from the date permission is granted by the Commissioner 

of Patents to file foreign patent applications where such filing has been prohibited by a 

Secrecy Order.

(4) The Contractor may request extensions of time for disclosure, election, or filing under 

paragraphs (c)(1), (c)(2), and (c)(3) of this clause.

(d) Government’s rights—

(1) Ownership. The Contractor shall assign to the agency, on written request, title to any 
vi

subject invention—

(i) If the Contractor fails to disclose or elect ownership to the subject invention within 

the times specified in paragraph (c) of this clause, or elects not to retain ownership; 

provided, that the agency may request title only within 60 days after learning of the 

Contractor’s failure to disclose or elect within the specified times.

(ii) In those countries in which the Contractor fails to file patent applications within the 

times specified in paragraph (c) of this clause; provided, however, that if the Contractor 

has filed a patent application in a country after the times specified in paragraph (c) of 

this clause, but prior to its receipt of the written request of the agency, the Contractor 

shall continue to retain ownership in that country.

(iii) In any country in which the Contractor decides not to continue the prosecution of 

any application for, to pay the maintenance fees on, or defend in reexamination or 

opposition proceeding on, a patent on a subject invention.

(2) License. If the Contractor retains ownership of any subject invention, the 

Government shall have a nonexclusive, nontransferable, irrevocable, paid-up license to 

practice, or have practiced for or on its behalf, the subject invention throughout the world.

48 C.F.R. § 52.227-11(a)–(d).