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ScanEagle Patent Battle Highlights Wartime Contracting Risks

Jan. 29, 2013 - 10:38AM   |  
By ARAM ROSTON   |   Comments
A Scan Eagle UAV hooks the cable on a SkyHook recovery system. ScanEagle's swept-wing design, which helps the UAV snag the cable, is at the center of a legal battle.
A Scan Eagle UAV hooks the cable on a SkyHook recovery system. ScanEagle's swept-wing design, which helps the UAV snag the cable, is at the center of a legal battle. (U.S. Navy)
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Radical advances in military science sometimes arrive from far afield. Take Kevlar, invented to reinforce radial tires years before it saw use in body armor and helmets. Similarly, the ScanEagle unmanned aircraft, one of the most popular military spy drones, arose from technology created to help fishing fleets find schools of tuna.

Now, a brewing legal war over the fish-finder-turned-weapon has opened a window on a rarely examined side of military contracting: ideas and intellectual property. How do you untangle who really owns the technology the U.S. government buys and deploys in battle?

A swept-wing UAV with a 10-foot wingspan, ScanEagle has become an ISR workhorse, deployed everywhere from Iraq to Somalia. Its manufacturer, Insitu, had $400 million in sales last year. Iran in December claimed to have captured one. And in fact, this fall, as tensions with Iran ratcheted higher, the Navy awarded another contract to Insitu to deploy, fly and maintain two more ScanEagle systems from warships in the Persian Gulf. It’s a drop in the bucket in the steady stream of contracts for the system.

Among the features that make the drone well-suited to deployment from a ship’s flight deck or a small combat outpost is its ability to land without a runway. Crews connect a taut cable to a vertical boom, then fly the little airplane so it snags the cable with a hook on its wing. They recover it easily, sliding it off the cable like a fish from a line.

That simple, ingenious feature, which Insitu calls SkyHook, is at the center of a legal war far from the conflict zone, in federal courts in Missouri and Washington, D.C. The stakes could be several hundred million dollars; the combatants bear familiar names.

On the one side of the legal struggle: an inventor who is a member of a defense-contracting dynasty. His name is William “Randy” McDonnell — as in McDonnell Douglas. He says he came up with the Skyhook landing system and that he is owed, big-time, for its use in ScanEagle. The lawsuits were filed under the name of McDonnell’s company, Advanced Aerospace Technologies Inc.

On the other side are Insitu, its corporate parent Boeing and the United States government. ScanEagle denies McDonnell’s claims. Tad McGeer, the man credited with inventing ScanEagle, calls them simple “nonsense.”

A FAMILY BUSINESS

To understand why McDonnell takes his aviation ideas seriously, consider his origins. Some men follow in the family footsteps to become firefighters or doctors or stockbrokers; McDonnell’s family business involved military planes.

For nearly 100 years, someone with the McDonnell name has been building airplanes of one kind or another. Back in 1924, McDonnell said, his great uncle, J.S. McDonnell, built his first plane, “the doodlebug,” to compete for a prize offered by the Daniel Guggenheim Fund for the Promotion of Aeronautics. The flimsy design didn’t win — the tail collapsed during the flight. The McDonnell Aircraft Corp. went on to build the first carrier-based jet fighter in 1945, the FH-1 Phantom. It was, in a sense, a revolutionary development.

McDonnell Aircraft merged with the Douglas Aircraft Co. in 1967, and Randy’s father, Sanford, ran the giant company from 1972 to 1988, after which Randy’s cousin, John McDonnell, took over as chairman. Randy worked in the family business and was promoted to corporate director of advanced projects, overseeing the most exotic efforts of the company. But he wasn’t happy; he wanted to be an inventor in his own right.

“My father always wanted me to take over,” he said, “but the farther up I got, the less I enjoyed what I was doing. The higher up I got, the more I felt like an administrator.”

McDonnell became fascinated early on with the idea of unmanned flight, years before the current obsession. And he could not get the company on board, back then. So he said goodbye to the family business and struck off on his own.

“I left in 1993 because of the unmanned potential,” he said, “and I didn’t think McDonnell Douglas was putting enough focus on it.”

The family reaction was predictable: “My father was not at all happy with that,” he said. “He tried to convince me to stay.”

He declined to discuss ScanEagle specifically or his litigation over the ScanEagle, referring questions to his lawyer. But his lawsuit claims that in the 1990s, he began working on efforts to deploy and recover UAVs “without the use of runways.” Landing gear, after all, meant more weight, limiting a UAV’s payload.

In his court papers, he says it was in 1997 that he came up with a “UAV retrieval system using a hook arrangement on the UAV’s wing to capture a vertical arrestment line.” He tested it with a remote-controlled airplane that same year, and in July 1999, filed a provisional patent application, the papers say.

As it happens, while McDonnell was plugging away at his idea, a tiny new company was trying to figure out a system for landing its UAVs.

UAV PIONEER

Insitu was founded by UAV pioneer Tad McGeer. McGeer, like McDonnell, had studied aeronautics at Princeton University, although the two men did not know each other.

Just about the same time McDonnell was cutting his ties with the family business, McGeer was setting up Insitu in Washington state. It had some remarkable success, and a few setbacks. In 1998, it managed to fly one of its UAVs across the Atlantic Ocean. But recovering the UAVs so they didn’t get damaged after the flight was the puzzle.

The first Insitu UAVs had straight wings. Each little plane would head out and then was supposed to catch a line to snag it so it could be retrieved. “Of course there were [problems],” McGeer admitted.

That’s where, McDonnell claims, his invention came in. In his lawsuit, McDonnell says that he heard about Insitu’s difficulties in retrieving their plane. In 1999, the papers say, he approached the company and spoke to McGeer about his idea. McDonnell “suggested to Insitu’s founder and chief technology officer, Tad McGeer, that Insitu should use a swept wing rather than the straight wing aircraft that Insitu had been using,” the papers say.

Swept wings, his lawsuit says, meant that a hook could more easily grab the line so the plane could be retrieved.

McGeer, who is not a defendant in the suit, but who is mentioned in the court record, concedes that his product first used a straight wing and then a swept wing. He also confirms that he met with McDonnell, although he said the meeting took place in 2000, not 1999. But he scoffed at the notion that any part of ScanEagle had anything to do with McDonnell or his patent.

He said he changed to a swept-wing design after an entirely different set of meetings.

“The reason the wings on ScanEagle are swept,” McGeer said, “is that in 1999 I went on a tuna boat. It was tuna fishing boats that were the original users.”

McGeer envisioned his UAV as an airborne scout for the fishermen, who could use its video camera to scour the ocean for fish. It took just one visit to a tuna boat to make him realize that “it is full of equipment with narrow passageways and burly guys.”

He said he realized that the UAV would have to be easy to assemble and pack away in tight spaces on rolling seas.

“To reduce the number of pieces, get rid of the tail, make it a swept wing,” he said. “It goes in a box, it takes less than a minute.”

So, he said, the swept-wing design had nothing to do with the hook to catch the retrieval line. It was just to make it easier for fishermen in rain gear to pack up the little plane.

FROM FISH TO FALLUJAH

The tuna boats never did blossom as a customer base. But a number of factors converged to make the little UAV more successful than anyone could ever have imagined: 9/11, the wars in Afghanistan and Iraq, and the new demand for intelligence, surveillance and reconnaissance.

In June 2002, Boeing issued a news release announcing that the ScanEagle “successfully made its first autonomous flight.”

“The UAV,” according to the news release, “was retrieved using the patented SkyHook technique, in which the ScanEagle catches a rope hanging from a 30-foot-high pole.”

In February 2003, Boeing announced that the UAV could stream video back to a navy vessel while in flight.

The real money started coming in June 2004, when the Marine Corps signed up, the first military service to buy the system. “It’s our eye in the sky,” said a Marine Corps spokesman. The planes flew over Fallujah during the heat of the insurgency.

Boeing, which had been partnering with Insitu all along, bought Insitu outright in 2008. (In an irony, Boeing had merged with McDonnell Douglas in 1996, a few years after McDonnell left the company.)

By 2009, the ScanEagle business had become huge. A $250 million contract from Special Operations Command sent the system to the major leagues.

As all this was happening, McDonnell was watching, according to court filings. He repeatedly negotiated with Insitu for some sort of royalty for what he said was his idea: swept wings for a UAV to help it catch a vertical line for the landing.

But the negotiations went nowhere. He said the offers weren’t worth anything.

McGeer, for his part, said any offers made to McDonnell were not because he had a legitimate claim but because Insitu just wanted to put the matter to rest.

“There were such negotiations,” he said, “and the idea behind them was, rather than argue, to say, ‘We are happy to recognize that the same idea was patented by two people at the same time. We would be willing to give you some small royalty rather than argue about it.‘“

In other words, McGeer isn’t disputing that McDonnell invented some form of the system. He’s just saying it’s irrelevant. “There are several inventors of this idea,” he said. “I’m one. Randy is one.”

“The end result,” McGeer said, “is he’s going to get nothing and the lawyers are going to get nothing because the lawsuit doesn’t have a basis.”

GOVERNMENT RESPONSIBILITY?

McDonnell isn’t just suing Boeing and Insitu. He’s also suing the U.S. government. The lawsuit charges that when the U.S. government bought the ScanEagle UAV, it too was in breach of his patent. And because most of Boeing’s business was with the government, the suit charges that Boeing and Insitu breached his patent “with the authorization and consent of the United States.”

One of the quirks of contracting law is that the U.S. government has the authority to allow its contractors to infringe on a patent. If it does, then the government, rather than the contractor, can be sued for royalties.

But there’s a catch: While an inventor can often seek an injunction against someone he says stole his idea, he can’t get an injunction against the government. That means he can’t get a judge to order the government to stop using his technology.

There’s a good reason for that. If there were injunctions against the U.S. military, it could be forced to pull deployed technology in the middle of a battle.

Martin J. Adelman, who teaches patent law at George Washington University, said the rule, and the problem it was meant to solve, date back a long time.

“During the first World War, people who had patents would sue and enjoin military suppliers from supplying the government’s war industry,” he said.

The demands of wartime contracting made that a devastating prospect, he said, so “the law was changed to make it clear that if you sued the government you could not get an injunction, you could only get damages and you had to go to the court of federal claims.”

The court of federal claims is the venue for suing the federal government, and McDonnell’s lawyers brought the claim there. It’s no easy legal matter. The government and Boeing both argue that the court doesn’t have jurisdiction and that the government hasn’t waived its sovereign immunity.

In the end, the key issue in patents, Adelman said, has been who invented the technology first. That is, even if, as McGeer maintains, both he and McDonnell invented this system, the decision may come down to the specific month and year.

“We have a first-to-invent system at the moment,” he said. “So two people may have invented it, but the question is who invented it first.”

TECHNOLOGY IN COURT

But while the law may be an old one, the challenge in an era of UAVs, cyber defense and complex spy equipment may be greater than ever. Enforcing patents in technological advances may be more critical, and yet more difficult, than ever before.

“We have a huge amount of technology the government is using now,” Adelman said. “The government is buying stuff, but they also want to buy freedom. They won’t want to buy lawsuits.”

The ScanEagle litigation is now in federal court in Missouri and at the court of federal claims in Washington, D.C. Boeing declined to discuss the specifics of the case because the case is pending, but, in a statement said, “we believe our products do not infringe the plaintiff’s patents and that the court will agree with us.”

McDonnell’s lawyer, Craig King declined an interview, but emailed a statement: “Mr. McDonnell’s pioneering inventions were a breakthrough in the world of retrieval of UAVs — and the importance of his contribution cannot reasonably be diminished. We are confident that when all the facts are known it will be clear that Insitu, Boeing and the government have used his inventions, infringed his patents and not paid him a dime, and he is now owed fair compensation for his inventions.”

McGeer has left Insitu and launched a new company called Aerovel. He’s still pursuing UAVs, and his next one, according to the company website, can take off and land vertically, but still fly like a plane.

———

This article first appeared in the January-February issue of C4ISR Journal.

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