Hughes Prevails in Long Patent Battle With U.S.
General Motors Corp.’s Hughes Electronics stands to collect $150 million in damages after the U.S. Supreme Court rejected a government appeal in a fight over patented technology used to help orient satellites.
The high court decision likely marks the final chapter in a marathon legal fight dating to 1973. El Segundo-based Hughes, the world’s largest satellite maker, charged that the government used its patented technology without permission from 1963 to 1982.
The case involved Hughes’ claim that its technology was one of the foundations of the communications satellite revolution and solved a difficult problem that had eluded government research scientists.
Although Hughes was successful in proving its claim that the government infringed on its patents, the damage award was a tiny fraction of what the company originally hoped to recoup. When the case went to trial in 1988, the company envisioned an award of several billion dollars.
Still, the $114-million award, not including back interest, ranked as the largest patent-infringement verdict against the federal government when it was handed down in 1994.
The justices, without comment, let stand an appeals court ruling upholding the 1994 damage award against the government. That award, representing royalties and other damages, has since swelled to about $150 million. The case now returns to a federal trial judge for final judgment, a step likely to be a formality.
“After 25 years, we’re gratified that it appears to be close to being concluded,” said Hughes spokesman Richard Dore.
Hughes had 1998 revenue of $6 billion. Its shares fell 6 cents Monday to close at $47.13 on the New York Stock Exchange.
Justice Department lawyers argued unsuccessfully that the technology in the disputed government satellites was not covered by the Hughes patent because it differed in crucial respects.
Both devices are designed to ensure that the antennas on communications satellites point toward the Earth. With the Hughes invention the satellite sends information about its positioning and movement to a ground crew, which then transmits control signals back to the satellite.
The system developed by the government, in contrast, relies on an on-board computer to reposition the satellite.
The U.S. Court of Appeals for the Federal Circuit in Washington nonetheless said the two inventions were similar enough to fall within the “doctrine of equivalents,” which extends patent protection to cover products or processes that are similar, though not identical, to the original invention.
The Justice Department, in arguments before the Supreme Court, said the appeals court ruling applied the doctrine of equivalents too broadly, in violation of a 1997 high court decision clarifying the scope of that legal principle. Among other things, the government argued that Hughes specifically limited its patent claim to include only devices that communicate to external systems.
Hughes said the two systems collect and process the same information.
“The only difference is that modern computer technology permits some of this information to be stored and used on the . . . satellite itself,” the company argued in a court filing.
Hughes separately settled a similar antitrust complaint filed against Ford Motor Co., which had owned what is now Loral Space & Communications Corp. The amount of the award was never disclosed, but The Times reported in 1989 that Ford paid $75 million to Hughes.
