IP Law Daily Government hit for $7.7M of ship designer’s fees, costs in hull-design dispute
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Thursday, April 8, 2021

Government hit for $7.7M of ship designer’s fees, costs in hull-design dispute

By Randall Holbrook, J.D.

An award of attorney fees was entered against the United States because it pursued litigation on a theory that was factually incorrect according to its own documents and experts.

In a dispute over warship hull designs, the United States litigated its defense of a ship designer’s patent infringement lawsuit in a substantially unjustified manner, the court of Federal Claims has held. The court decided that the designer was entitled to an award of over $7.7 million in attorney fees and costs incurred in the litigation. The government had litigated on the theory that its ship design did not produce lift at the stern due to the hull design, whereas the government’s documents produced in discovery and the government’s trial expert showed that this was untrue. The decision originally was filed under seal on March 31 (FastShip, LLC v. U.S., April 7, 2021, Lettow, C.).

FastShip, LLC, was the owner of U.S. Patent Nos. 5,080,032 and 5,231,946, both of which described a ship with a hull design that, in combination with waterjet propulsion, would allow high speed travel in unfavorable sea conditions. The United States Navy’s Littoral Combat Ship program developed ships that allegedly infringed on those patents. After a 10-day trial, the Court of Claims found that the Navy did infringe the patents; in a post-trial order it awarded damages along with attorney fees and costs. The United States appealed, and the attorney fees and cost award was vacated by the Federal Circuit due to improper consideration of pre-litigation conduct. On remand, the Court of Claims again considered an award of attorney fees to FastShip.

The United States argued that its litigating position, although ultimately unsuccessful, was substantially justified, and that it acted in good faith and did not engage in fraud. The court noted that good faith and fraud were not at issue and did not share the same analysis as substantial justification, so the government’s arguments on those points were not considered. FastShip argued that the government’s positions on whether the patented hull design and waterjet powering mechanism enabled the Navy’s ships to gain higher speeds in the water by lifting the stern and reducing drag were substantially unreasonable because the government maintained throughout the litigation that the ship in question did not reduce drag by lifting the stern, even though the government’s discovery responses and its own expert showed the opposite. The court also noted several serious mistakes in the government’s evidence. These mistakes included use of a model which it was determined did not actually match the ship in question, changing from metric to imperial units in a way that appeared intended to cause confusion, and pervasive mathematical errors in the government’s expert witness’s testimony.

Finding that the government had not met its statutory burden of showing that its litigating position was substantially justified, the court awarded $6,091,976.70 in attorney fees, $464,948.69 in expert fees, and $1,229,676.07 in costs to FastShip.

This case is No. 1:12-cv-00484-CFL.

Attorneys: Mark L. Hogge (Dentons US LLP) for FastShip, LLC. Scott Bolden, U.S. Department of Justice, for the United States.

Companies: FastShip, LLC

MainStory: TopStory Patent GCNNews

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