958 F.3d 1162
Fed. Cir.2020Background
- Hitkansut owned U.S. Patent No. 7,175,722 and provided ORNL a copy of the unpublished application under an NDA; ORNL then used the technology in research according to the Claims Court.
- Hitkansut sued the United States under 28 U.S.C. § 1498(a) for patent infringement; the Claims Court found claims 1, 6, and 11 infringed and awarded $200,000 as a hypothetical one-time license fee.
- The Claims Court later awarded Hitkansut $4,387,889.54 in attorneys’ fees under § 1498(a); the United States appealed.
- Central legal question: whether the phrase “the position of the United States” in § 1498(a) includes pre‑litigation government conduct (e.g., agency action/inaction) or is limited to litigation positions.
- The Federal Circuit reviewed statutory interpretation de novo and factual/fee determinations for abuse of discretion.
- The court held that “the position of the United States” refers to litigation positions only, but found the government’s litigation positions were not substantially justified and affirmed the fee award; it also rejected the government’s argument that fees should be reduced because monetary recovery was smaller than sought.
Issues
| Issue | Hitkansut's Argument | United States' Argument | Held |
|---|---|---|---|
| Scope of “the position of the United States” in § 1498(a) | Term includes agency action/failure to act (pre‑litigation conduct) | Term refers only to positions taken in the civil litigation | Refers to litigation positions only; Congress did not adopt EAJA’s broader post‑1985 definition |
| Whether government’s position was “substantially justified” | Gov’t litigation positions contradicted by documents, testimony, and expert admissions; thus not substantially justified | Gov’t litigation positions were reasonable and thus substantially justified | Not substantially justified — discovery responses, obviousness and enablement defenses were factually weak/inconsistent |
| Whether Claims Court may consider pre‑litigation facts when assessing justification | Court should consider pre‑litigation conduct as part of assessing whether litigation positions are reasonable | Position term limited to litigation, but pre‑litigation facts irrelevant | Litigation positions govern, but court may consider pre‑litigation facts to evaluate whether those litigation positions had a reasonable basis in fact |
| Need to reduce fees because damages awarded were much lower than damages sought | Hitkansut prevailed on its sole claim and proved compensable damages; no proportional reduction needed | Fees should be scaled to the degree of success because awarded damages were far less than sought | No reduction required — prevailing on sole claim with compensable damages does not mean “limited success” requiring fee cut |
Key Cases Cited
- Broad Ave. Laundry & Tailoring v. United States, 693 F.2d 1387 (Fed. Cir. 1982) (EAJA phrase “position of the United States” refers to litigation positions)
- Boudin v. Thomas, 732 F.2d 1107 (2d Cir. 1984) (look only to government’s litigation position for EAJA purposes)
- United States v. 2,116 Boxes of Boned Beef, 726 F.2d 1481 (10th Cir. 1984) (same)
- Tyler Bus. Servs., Inc. v. NLRB, 695 F.2d 73 (4th Cir. 1982) (same)
- Comm’r, I.N.S. v. Jean, 496 U.S. 154 (1990) (“substantially justified” requires reasonable basis in law and fact)
- Pierce v. Underwood, 487 U.S. 552 (1988) (standard for awarding fees where government position not substantially justified)
- Hensley v. Eckerhart, 461 U.S. 424 (1983) (degree of success is a critical factor in fee adjustments)
- Farrar v. Hobby, 506 U.S. 103 (1992) (nominal damages may justify denying fees; context for scaling fees to results)
- Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91 (2011) (start statutory interpretation with ordinary meaning)