Gargoyles, Inc. and Pro-Tec, Inc. v. United States
Published: Feb. 22, 1997 | Result Date: Jan. 6, 1997 | Filing Date: Jan. 1, 1900 |Case number: 34288C – $0
Facts
In 1971 Col. Francis LaPiana, an Army optometrist who advocated the development of protective eyewear for soldiers, discussed his desire for military eye protection with American Optical (AO). AO informed him that the type of protection he sought (ballistically resilient with afull orbital cover, while being attractive enough for soldiers to wear even when off duty), though technically feasible, was uneconomical. By 1981, Col. LaPiana learned of Gargoyles Inc. fashion eyewear. Col. LaPiana spoke to Dennis Burns, founder, chief executive officer, president and principal stockholder of plaintiffs Pro-Tec and Gargoyles, Inc. after learning of Gragoyles' claims of eyewear that provided ballistic protection with substantial wrap depth, while maintaining an attractive appearance. From 1981 to 1986, Burns made several presentations to the defendant Army about Gargoyles eyewear and his belief that it corresponded favorably to its need for protection and attractiveness. Col. LaPiana provided Burns with the results of Army tests on Gargoyles. The Army performed extensive testing of Gargoyles from 1981 to 1986. While Gargoyles were considered attractive, they were deemed insufficiently durable for Army use, as they had too much optical distortion, and fit poorly with insufficient areal coverage on large males and commercial Gargoyles could not be worn by soldiers requiring prescription eyewear. While the Army was testing Gargoyles, it was also developing its own ballistic eyewear for soldiers. The eyewear was conceived as two different types: the Ballistic Eye Protection Emmetrope (BEPE), for non-prescription eyewear and that Integrated Field Eyewear System (IFES), which was protective eyewear with a prescription insert. The original draft of the technical specifications in the BEPE requests for proposals required the eyewear to have a "toric wrap lens so as to be attractive by avoiding the "bug eye look" produced by spherical lenses of wrap depth." Melvin Jee, who was ultimately responsible for the technical specifications of the BEPE, deleted the requirements that the BEPE have toric lenses and be attractive in appearance. The IFES's techinical specifications required the eyewear to have toric lenses and an attractive appearance. Gargoyles did not submit a proprosal in response to the BEPE request for proposals. The Army ultimately awarded the BEPE contract to AO on Nov. 19, 1984. All eyewear procured pursuant to the BEPE contract was received by the Army prior to the issuance of the plaintiff's patent, and thus was not at issue. Plaintiff Gargoyles did, however, submit a proposal in response to the IFES request. On Sept. 11, 1984, the Army informed Gargoyles that its costs were considered too high and that the government needed a complete Techcnical and Data Package with unlimited rights in that technical data. In response to this letter, theplaintiff withdrew its proposal on Sept. 27, 1984. The Army awarded two contracts as a result of the IFES request for proposals. The second, (the IFES, "5073 contract"), was awarded to AO on Dec. 31, 1984. Of the units procured under the contract, only 50 pairs of eyewear were actually delivered after the issuance of the plaintiff's patent. In 1988, the U.S. Patent Trademark Office issued the plaintiffs a patent covering integrally formed eyewear with rwaparound lenses having toric inner and outer surfaces and zero power. Ultimately the defendant developed two more types of protective military eyewear: the B/LPS, a combination of the BEPE and IFES with laser protection; and SPECS, with enveloped cylindrical lenses instead of toric lenses. The B/LPS contract was awarded to AO. The plaintiffs claimed the B/LPS infringed its patent. The plaintiffs brought this action against the United States based on apatent infringement theory of recovery.
Settlement Discussions
The plaintiffs made a settlement demand for $3.2 million. The defendant made a settlement offer of $1,000. Per the plaintiff, offers were made before the liability trial when the number of eyewear procured was allegedly in excess of 200,000 pairs.
Damages
The plaintiffs sought lost profits for the defendant's actions, or in the alternative, a reasonable royalty of 50 percent of the defendant's procurement savings.
Other Information
The verdict was reached approximately six years and sixmonths after the case was filed. In 1992, a trial on liability was held, and the court found that the Army had not infringed the plaintiffs' patent. The Federal Circuit affirmed the court's finding of noninfringement of the design patent and of no literal infringement of two claims but remanded for reconsideration of literal infringement as to a third claim and for an examination of the doctrine of equivalents as to all three claims. On remand, the district court found that the Army's acquisition of the Ballistic Laser Protective System (B/LPS) did infringe two claims. The parties agreed that after the issuance of the patent, the Army procured a total of 442,357 units. POST TRIAL MOTIONS: The case is on appeal to the United States Court of Appeals for trhe Federal Circuit. The government appealed liabilty and the 10 percent royalty. Gargoyles appealed on the issue of lost profits. Lost profits have not been awarded in patent infringement litigation against the government in over 60 years.
For reprint rights or to order a copy of your photo:
Email
jeremy@reprintpros.com
for prices.
Direct dial: 949-702-5390