December 5, 2019
A recent Law 360 story by Tiffany Hu, “DOJ Asks Fed. Circ. To Scrap Dentons’ $7M Fee Award,” reports that the U.S. Department of Justice is asking the Federal Circuit to wipe out $7.4 million in attorney fees secured by Dentons in a lawsuit accusing the Navy of infringing a company’s patents in a combat ship, saying the lower court went “too far” in its analysis. In an opening brief, the DOJ said that the U.S. Court of Federal Claims in July incorrectly awarded attorney fees to Dentons for its work on behalf of FastShip LLC, which claimed that some of the Navy’s combat ships infringed two of its patents.
Among other things, Judge Charles F. Lettow had found that the federal government’s opposition to FastShip’s lawsuit was not “substantially justified” under a federal provision governing the amount that can be recovered in a lawsuit against the government. That provision says a patent owner can get reasonable compensation in a suit against the government unless the government's position was substantially justified.
The DOJ argued that Judge Lettow erred in considering the government’s conduct before litigation, as the provision in question restricts the patent owners’ compensation to costs incurred “in pursuing the action,” the department said in its brief. But even if pre-litigation conduct could be considered, the DOJ said, the judge went “too far” when he relied on certain allegations that either had nothing to do with the present lawsuit or the claimed use of the invention.
“This construct is unduly broad even if some pre-litigation conduct could be considered,” the DOJ wrote. “The CFC’s definition goes well beyond the ‘claim’ — i.e., the facts necessary to establish infringement — and into some ill-defined totality of facts that include the procurement actions of contractors in which the government was not involved.” The department urged the Federal Circuit to toss the lower court’s award of fees and costs and to send the case back to the court to reconsider whether the government’s position in the present action was “substantially justified.”
Judge Lettow ruled partly in favor of FastShip in 2017, finding that one ship, LCS-1, had infringed, but that a second, LCS-3, and any that followed in the class had not because they were still being manufactured when the patents expired. The Federal Circuit in June 2018 upheld Judge Lettow’s ruling and raised the damages award slightly to $7.1 million. FastShip ultimately recovered $12.36 million for the infringement, including delay damages, Judge Lettow wrote in his July order.
Judge Lettow’s July ruling said that the “conduct of the government, both before and throughout this litigation, belies its argument that it was ‘substantially justified.’” The judge said that among his reasons for awarding the fees and costs was that FastShip met with Lockheed during the procurement process and shared its patent technology, but that FastShip was ultimately not included as a part of the team.
“Lockheed Martin would go on to manufacture the Freedom class of ships for the government, with a completion and infringement date for LCS-1, of September 26, 2006,” Judge Lettow wrote. The judge also questioned if the government had done a proper investigation after FastShip filed an administrative claim with the Navy in 2008. The Navy said it did a “thorough analysis” and found no infringement after the claim was filed, although it did not share the analysis with FastShip when it wrote the company a letter after it “sat” on the claim for two years, he wrote.
“At best, this was a perfunctory response to the concerns of FastShip that ultimately proved legitimate. At worst, it may have delayed FastShip’s filing of its claim in this court by two years,” Judge Lettow wrote. The judge made partial adjustments to the $8.72 million of fees and costs requested by FastShip, ultimately awarding more than $7.4 million, including over $6.17 million in attorney fees and related expenses, and over $1.2 million in costs.