FastShip, LLC v. United States
| Decision Date | 31 March 2021 |
| Docket Number | No. 12-484C,12-484C |
| Parties | FASTSHIP, LLC, Plaintiff, v. UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
Patent case; prevailing plaintiff's claim for attorneys' fees and expenses; 28 U.S.C. § 1498(a); lack of substantial justification for government's position; attorneys' fees and expenses
Mark L. Hogge, Dentons US LLP, Washington, D.C. for the plaintiff. With him on briefs were Rajesh C. Noronha, Dentons US LLP, Washington, D.C. and Donald E. Stout, Fitch, Even, Tabin & Flannery LLP, Washington, D.C.
Scott Bolden, Deputy Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C for the United States. With him on briefs were Jeffrey Bossert Clark, Acting Assistant Attorney General, Civil Division, Gary L. Hausken, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C, and Andrew P. Zager, Department of the Navy, Washington, D.C.
Pending before the court in this patent case is FastShip, LLC's motion for attorneys' fees and bill of costs.2 The court previously found that in constructing a class of littoral combat ships("LCS"), the Navy infringed two patents held by FastShip. See FastShip III, 131 Fed. Cl. at 627-28 (); FastShip IV, 892 F.3d at 1310 (). Ultimately, FastShip recovered $12.36 million, including interest. See FastShip V, 143 Fed. Cl. at 709. In 2018, plaintiff initially moved for attorneys' fees and related expenses. See Pl's Mot. for Atty's Fees & Related Expenses, ECF No. 190. The court granted plaintiff's motion in part and awarded FastShip $7,407,967.36 for attorney's fees and related expenses. Id. at 735. The government appealed the court's ruling, and the Federal Circuit vacated and remanded. FastShip VI, 968 F.3d at 1336. FastShip now renews its motion for attorneys' fees and costs. The court finds that the government's litigating positions were not substantially justified. Therefore, FastShip's motion is GRANTED IN PART and DENIED IN PART, and the court awards FastShip fees and costs totaling $7,786,601.46.
This case concerns two patents originally issued to David Giles and later assigned to FastShip. See U.S. Patent Nos. 5,080,032 ("the '032 patent") (issued Jan. 14, 1992) and 5,231,946 ("the '946 patent") (issued Aug. 3, 1993). The patents described the claimed invention as a "monohull fast sealift . . . or semi-planing monohull . . . ship . . . whose hull design in combination with a waterjet propulsion system permits . . . transoceanic transit speeds of up to 40 to 50 knots in high or adverse sea states" for large ships "of about 25,000 to 30,000 tons displacement with a cargo carrying capacity of 5,000 tons." '032 Patent col. 1, lines. 6-13; '946 Patent col. 1, lines. 10-17.
Beginning in the early 2000s the Navy began "exploring the concept that later became the LCS program[,] seeking new ships that could be used for 'focused missions' at high speeds," and requested proposals for the LCS program in 2003. FastShip III, 131 Fed. Cl. at 600 (internal citation omitted). The Navy's request did not specify a required hull design. See id. FastShip engaged with two government contractors involved in the LCS program and signed an agreement that provided for "information sharing between the LCS team and FastShip." Id. at 601-02. While it was "unlikely" that the parties would enter into a direct arrangement concerning hull design, FastShip could be added "to the team for certain design aspects" of the project. Id. at 601 (internal quotation marks and citation omitted). Despite this understanding, FastShip was not involved in the design of the ship during the procurement or construction process. See id. at 602-03. The first of the ships produced in the LCS program, LCS-1, USS Freedom, launched on September 23, 2006, and featured a semi-planing monohull. Id. at 602-03. In 2008, FastShip filed an administrative claim with the Navy, contending that the LCS program infringed on its patents. FastShip II, 122 Fed. Cl. at 77. The Navy responded to the administrative claim two years later, stating that, after investigation, it believed the LCS program did not infringe on FastShip's patents and denying any compensation. Id.
Subsequently, in August 2012, FastShip filed its complaint in this court. FastShip II, 122 Fed. Cl. at 77. FastShip's claims addressed ships produced within the Freedom class of the LCS program. Id.3 The parties submitted briefs on claim construction, and the court held a Markman hearing and in October 2013 issued an opinion construing eight of the claim terms. FastShip I, 114 Fed. Cl. 499.
After the parties conducted discovery, the government moved for summary judgment. FastShip II, 122 Fed. Cl. at 77. The court granted the government's motion with regard to LCS-3 and the subsequent ships in the Freedom class on the ground that those ships "were not 'manufactured' by or for the government within the meaning of 28 U.S.C. § 1498 prior to the expiration of the patents in suit." Id. at 86. Following this decision, FastShip's remaining infringement claims only concerned LCS-1, USS Freedom. FastShip III, 131 Fed. Cl. at 607.
After a site visit to the constructing shipyard, the court held a 10-day trial in October 2016. FastShip III, 131 Fed. Cl. at 607.4 The court ultimately issued a decision in April 2017, finding that the '032 and '946 patents were valid, and that the government, through the construction of its LCS-1 ship, directly infringed FastShip's patents. See id. at 618. The court awarded FastShip $6,449,585.82 in damages plus interest for delayed compensation. Id. at 627. Additionally, the court stated that FastShip could apply for "reasonable costs and reasonable fees for expert witnesses and attorneys under 28 U.S.C. § 1498(a) . . . within 30 days after any appellate process has been concluded." Id. at 627-28. On appeal, the Federal Circuit affirmed this court's decision of infringement as to LCS-1 and its grant of summary judgment in the government's favor as to LCS-3 and subsequently manufactured ships, while modifying the damages amount due to a transcription error. FastShip IV, 892 F.3d at 1310. Each party was to "bear its own costs" for the appeal. Id. at 1311.
After prevailing on the appeal, FastShip filed a motion for attorneys' fees and related expenses and a bill of costs in October 2018. See ECF Nos. 190-91. The government opposed FastShip's motion. See Def.'s Objs. to Pl.'s Bill of Costs, ECF No. 201; Def.'s Resp. to Pl.'s Mot. for Att'ys' Fees, ECF No. 203. The parties fully briefed the motion, see ECF Nos. 211-12,and the court held a hearing on April 3, 2019.5 In June 2019, the court entered an opinion awarding FastShip attorneys' fees and costs. FastShip V, 143 Fed. Cl. at 735. The court—building on its prior determination in Hikansut LLC v. United States, 142 Fed. Cl. 341 (2019)—stated that "[t]he text of 28 U.S.C. § 1498(a) refers to a single 'position of the United States' . . . [and] makes no distinction between the pre-litigation position and the position taken once litigation commences." FastShip, 143 Fed. Cl. at 719 (quoting Hikansut, 142 Fed. Cl. at 357). The court thus considered "all of the government's conduct . . . when determining whether the position of the United States was 'substantially justified.'" Id. at 720 (emphasis in original). Ultimately, the court determined that that government's "overall conduct demonstrates its position was ultimately not 'substantially justified' when viewed in totality," id. at 723, and awarded FastShip $6,178,288.29 in attorneys' fees and $1,229,679.07 in costs, id. at 735.
An appeal followed. See FastShip VI, 968 F.3d 1335. The Court of Appeals for the Federal Circuit found that this court erred by relying on the government's pre-litigation conduct when determining whether the position of the United States was substantially justified. Id. at 1338-39. The Federal Circuit stated that because the decision relied "in large part on pre-litigation conduct and did not conclude that the litigation conduct itself was sufficient for an award of fees, a remand [was] required." Id. at 1339. The Circuit directed this court on remand to "consider whether the government's litigation conduct alone, to the extent that it was not substantially justified, was sufficient to justify a fee award." Id.6
FastShip thereafter renewed its motion for attorneys' fees and costs. See Pl.'s Renewed Mot. for Att'ys' Fees & Related Expenses ("Pl.'s Mot."), ECF No. 233; Pl.'s Mem.; Pl.'s Renewed Mem. in Supp. of its Bill of Costs ("Pl.'s Bill of Costs"), ECF No. 236. FastShip argues that the government's litigating positions were not substantially justified, and therefore, it is entitled to attorneys' fees and costs associated with the litigation. See Pl.'s Mem. The government counters with three alternative arguments. Def.'s Resp, ECF No. 235. It first argues that FastShip's "renewed [Bill of Costs is] impermissibly untimely." Id. at 8. Additionally, the government argues that its litigation position was substantially justified, id. at 8-29, or, if the court awards costs and fees, FastShip should be awarded a reduced amount, id. at 29-39. The motion has been fully briefed, see Pl.'s Reply, ECF No. 238; Def.'s Sur-Reply, ECF No. 240. FastShip filed a supplemental memorandum detailing "additional documentary support for fees incurred since the time of its renewed motion." Pl.'s Suppl. Mem. at 2, ECF No. 242. The court held a hearing on January 26, 2021.
Title 28, Section 1498 of the United States Code governs the award of compensation in patent cases. When the United States...
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