968 F.3d 1335
Fed. Cir.2020Background:
- FastShip is assignee of two patents covering hull designs that increase hull efficiency to enable high-speed ships; it discussed designs with Navy contractors under confidentiality but was not awarded a role in the LCS program.
- FastShip filed an administrative infringement claim (2008) with the Navy; after denial it sued the United States in the Court of Federal Claims in 2012 under 28 U.S.C. § 1498(a).
- After a 10-day trial the Claims Court found the ’032 and ’946 patent claims valid and that the government infringed the LCS‑1; this liability finding was affirmed in FastShip I, 892 F.3d 1298 (Fed. Cir. 2018).
- FastShip, a small entity, moved for attorney’s fees under § 1498(a); the Claims Court awarded $6,178,288.29, concluding the United States’ pre-litigation conduct and certain litigation positions were not substantially justified.
- On appeal the government argued the Claims Court erred by (1) considering pre‑litigation conduct in the substantial‑justification inquiry and (2) improperly discounting the government’s expert and feasibility analysis; the Federal Circuit vacated and remanded.
Issues:
| Issue | FastShip's Argument | United States' Argument | Held |
|---|---|---|---|
| Whether §1498(a) fee inquiry may consider pre‑litigation conduct | Pre‑litigation misconduct (procurement meetings, slow admin denial) shows government position not substantially justified | Position of the U.S. includes only litigation positions; pre‑litigation conduct irrelevant | Court: Pre‑litigation conduct cannot be considered under §1498(a); fee award based on that was error (per Hitkansut) — remand required |
| Whether government’s use of imperial units for Figure 11 was substantially justified | Figure 11 supports infringement; gov’t plotted LCS‑1 in imperial units without evidence, so position was unreasonable | Using imperial units to show non‑infringement was reasonable | Court: Claims Court’s finding that gov’t used wrong units and lacked justification is not clearly erroneous; gov’t position on units was not substantially justified |
| Whether reliance on expert Mr. Blount (feasibility analysis) was unreasonable because he was "extraordinarily" skilled | Expert’s opinion was unreliable and not that of a person of ordinary skill | Proffering a highly skilled expert is permissible; the expert’s actual skill is irrelevant to admissibility/weight | Court: It was error to fault gov’t for using a highly experienced expert; proffering Blount’s analysis was not per se unreasonable — remand to reassess fees based only on litigation conduct |
| Remedy — whether fee award stands or must be reexamined | Fee award appropriate given totality (including pre‑litigation) | Award must be vacated or remanded because Claims Court relied on impermissible factors | Court: Vacated and remanded for the Claims Court to decide if litigation conduct alone justifies fees; did not resolve proportionality of partially justified positions |
Key Cases Cited
- Hitkansut LLC v. United States, 958 F.3d 1162 (Fed. Cir. 2020) (holds "position of the United States" in §1498 refers only to litigation positions, excluding pre‑litigation conduct)
- FastShip, LLC v. United States, 892 F.3d 1298 (Fed. Cir. 2018) (merits decision affirming infringement finding for LCS‑1)
- Romag Fasteners, Inc. v. Fossil, Inc., 866 F.3d 1330 (Fed. Cir. 2017) (remand appropriate where court erred in its totality‑of‑circumstances analysis)
- Pierce v. Underwood, 487 U.S. 552 (U.S. 1988) (standard of review and framework for "substantially justified" inquiry)
- Doty v. United States, 71 F.3d 384 (Fed. Cir. 1995) (government bears burden to prove its position was substantially justified)
- Endress + Hauser, Inc. v. Hawk Measurement Sys. Pty. Ltd., 122 F.3d 1040 (Fed. Cir. 1997) (an attack on an expert on grounds that he is not a person of ordinary skill is meritless)
- Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448 (Fed. Cir. 1985) (the actual expert’s skill is irrelevant to the inquiry)
- Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 572 U.S. 559 (U.S. 2014) (a court abuses discretion if it bases a ruling on an erroneous view of the law)