A recent Law 360 story by Britain Eakin, “Gov’t. Urges Fed. Circ. To Deny Novel Fee Bid in IP Appeal” reports that after failing to fend off a $4.4 million fee award on top of a $200,000 judgment for infringing a metal treatment technology patent, the government has told the Federal Circuit it has no authority to grant an inventor's untested bid seeking supplemental fees for defending the fee award.
In a response filed to a May 29 request from Hitkansut LLC and Acceledyne Technologies Ltd. LLC for appellate fees — a matter the Federal Circuit hasn't addressed before under Section 1498 of the Patent Act — the government argued that only the U.S. Court of Federal Claims can grant fee requests under that provision of the law. "There is no indication in the statute or its legislative history that Congress intended to include post-judgment attorneys' fees within the ambit of those recoverable. By including the fees in the underlying compensation award, the statute is open to only one interpretation: that the ability to award ... attorneys' fees ends with the final judgment of the Court of Federal Claims," the response said.
The companies, owned by late inventor Donna Walker, who passed away in 2018, asked the appeals court for supplemental attorney fees after a three-judge panel on May 1 affirmed the U.S. Court of Federal Claims' March 2019 grant of fees. The lower court found in 2017 that government researchers at the Oak Ridge National Laboratory directly took Hitkansut's patent-pending technology, which can be used to relax stressed metal in large metal structures like airplanes, without giving Walker any credit, funding or contracts.
Hitkansut and Acceledyne were able to recoup fees at the claims court under a provision of the Patent Act that allows independent inventors, nonprofits and small businesses to recover fees when the government infringes, provided they can show the position of the United States was not "substantially justified." The Federal Circuit said in its May 1 opinion that the government's litigation position was not substantially justified because its arguments were contrary to the evidence in the case and the testimony of government employees, and that its invalidity argument was "contradicted by its own expert witness." The court, however, instructed the parties to bear their own costs.
But Hitkansut and Acceledyne contend that the court has the authority to order the government to pay additional fees under Section 1498, which they argued is not limited to the claims court action and so entitles them to recoup all of their costs, including those associated with defending their initial fee bid. And although the appeals court hasn't addressed whether fees for defending an initial fee bid can be recouped under Section 1498 before, Hitkansut and Acceledyne argued that the court has done so in Wagner v. Shinseki under an analogous law — the Equal Access to Justice Act.
The court in Wagner said that because he partially prevailed in defending against the government's challenge to his initial bid for fees, "he was entitled to supplemental fees." The Wagner court reasoned that a prevailing party can recoup fees not just for underlying litigation but also for defending an initial EAJA fee request. Hitkansut and Acceledyne urged the court to apply the same reasoning it did in Wagner to this case, but the government contends its reliance on Wagner is "misplaced" because it says the EAJA is "fundamentally different" from Section 1498, which it said doesn't give the Federal Circuit jurisdiction over supplemental fee requests.
Congress enacted the Section 1498 fee provision because it believed the EAJA was unavailable for such claims, the government said. "Had it wanted to do so, Congress had a clear model in EAJA to insure recovery of appellate fees and costs. But Congress selected a different path," the government said.