Hughes Awarded Judgment in Long-running Patent Case.

EL SEGUNDO, Calif.--(BUSINESS WIRE)--April 2, 1999--Hughes Electronics Corp. was awarded a final judgment against the United States Government stemming from its long-running patent infringement case, known as the Williams case, which was originally filed by Hughes in 1973.

Judge James Turner of the Federal Claims Court entered the $154 million judgment on Friday, March 12. Hughes received payment from the U.S. Treasury Department March 30.

The judgment by Turner was entered after the U.S. Supreme Court on March 1 denied a government certiorari petition to review an appellate court ruling. The Court of Appeals for the Federal Circuit affirmed Turner's decision in August 1994, ordering the government to pay Hughes for repeatedly infringing over a span of two decades on a pioneering communications satellite patent.

The case was known as the Williams case after Hughes scientist Donald Williams, whose patent revolutionized satellite attitude control. The dispute centered on Williams' 1959 invention of a satellite attitude control system that proved to be the solution to a problem that had stymied government and private industry scientists. Williams applied for a patent in April 1960, and that invention, characterized by NASA at the time as a "unique" and "important patent," made the geosynchronous satellite practical and ushered in the age of global satellite communications.

Turner in 1994 ruled on a two-part formula to determine the compensation to Hughes, which was awarded a U.S. Patent in 1973.

Turner ruled that 81 spacecraft, manufactured by contractors other than Hughes for or on behalf of the U.S. Government, violated the Hughes patent and had value of nearly $3.6 billion. He set a royalty rate of 1 percent accounting for nearly $36 million of the award.

The second part of the award is the delay compensation, which is required by law to compensate the injured party for the loss of the use of the unpaid royalties. The delay compensation is based on the rate the Internal Revenue Service pays on overdue tax rebates and is valued at about $118 million.

Communications over satellites at the earlier time were extremely limited because the spacecraft orbited close to Earth and would disappear over the horizon and out of view of the ground stations. The ground stations had to track the satellite as it passed overhead.

In July 1963, the Hughes-built Syncom using Williams' invention became the first satellite to operate successfully in geosynchronous orbit. In that orbit about 22,200 miles above the equator, a satellite's velocity matches the rotation of the Earth and appears to hover over the same spot, thereby allowing 24-hour use of the satellite through fixed ground antennas.

The benefits of communicating via satellite from that orbit were immediately recognized. Geographical barriers such as oceans and mountains were no longer obstacles in the communications Syncom provided. The success of Syncom spawned today's global commercial satellite industry.

The 81 satellites cited by Judge Turner in his ruling, however, were government or scientific spacecraft only. Of those, about 75 percent were military.

The growing success of communications satellites today had a rocky start in the 1950s as the United States unsuccessfully pursued various designs in an attempt to place a satellite in geosynchronous orbit.

Later that decade, a team of Hughes scientists, using company funds, developed a lightweight, spin-stabilized satellite that could be carried on existing launch vehicles into geosynchronous orbit. The design used Williams' invention, in which a single gas jet orients the satellite in space.

Hughes built a prototype of the satellite, but could not interest the government in the design until August 1961 when NASA awarded Hughes a contract to build Syncom. In 1966, the U.S. Patent Office allowed Williams' claim, but NASA filed a request that the patent be issued in its name because the invention was first used in a NASA satellite.

The Court of Customs and Patent Appeals ruled in August 1972 that Hughes was the rightful owner of the patent. After the U.S. Supreme Court denied another government petition, a U.S. patent was issued to Hughes in September 1973.

Hughes in November 1973 filed suit in the U.S. Court of Claims, charging that the government used its patent without authority and sought reasonable compensation. The invention was used on every geosynchronous orbit satellite from 1963 through 1974, and on every satellite from 1963 until 1982 that used a solid fuel motor in its transfer to geosynchronous orbit.

After another decade of litigation, the Court of Appeals for the Federal Circuit in September 1983 ruled that Williams' patent was valid and that both real-time and store-and-execute spacecraft infringed on that patent. The case was turned over to the Claims Court for the accounting trial under Judge Turner, who made his ruling in August 1994.