[00:00:00] Speaker 00:
The argument is 191884, Hickinson versus United States.

[00:00:56] Speaker 06:
I please the court, Gary Hoskin for the United States.

[00:01:00] Speaker 06:
We present two issues here today for the court's consideration.

[00:01:05] Speaker 06:
The first one is defining the term position of the United States in the attorney's fees provision of 28 U.S.

[00:01:14] Speaker 06:
Code 1498A.

[00:01:16] Speaker 06:
And secondly, regardless of the outcome of that first issue, we would also ask the court to

[00:01:25] Speaker 06:
find as error the lower court's decision not to scale damages in this case in accordance with the Supreme Court's decisions in Henley and Farrar.

[00:01:43] Speaker 06:
The question presented by the United States is limited specifically to the definition of position of the United States in that provision, which

[00:01:53] Speaker 06:
is a little bit broader and the full statement is position of the United States was substantially justified.

[00:02:02] Speaker 06:
The substantially justified portion has been previously.

[00:02:06] Speaker 00:
Let me just move forward here.

[00:02:09] Speaker 00:
Let's assume, arguably, for sake of argument, that we agree with you on the statutory interpretation.

[00:02:16] Speaker 00:
We agree that the Court of Federal Claims erred.

[00:02:20] Speaker 00:
Is there not enough in the opinion in terms of his reliance on the litigation conduct?

[00:02:27] Speaker 00:
you parse through what should therefore come out and what should stay in.

[00:02:32] Speaker 00:
He didn't make an alternative holding, but he has some strong language, particularly at A-19, about arguments directed toward showing of obviousness failed to address an essential element of each of three asserted claims or demonstrate any motion to combine.

[00:02:46] Speaker 00:
Those are all good findings, right, under your view of

[00:02:52] Speaker 06:
We dispute some of those, Your Honor.

[00:02:56] Speaker 00:
You may dispute them, but that's a different issue.

[00:02:59] Speaker 00:
But there are a number of findings, in his opinion, that don't go to the pre-litigation conduct or don't rely on that.

[00:03:09] Speaker 00:
So my question to you is, can you tell me why, on this record, based on these findings, even if we agree with you on the statutory construction, there is not enough basis to affirm?

[00:03:21] Speaker 06:
Your Honor, I think it's, well, given the standard of review on the second part of that, which is abuse of discretion, I think that the court certainly could find that.

[00:03:38] Speaker 06:
I don't think they should find it.

[00:03:39] Speaker 06:
I think it should be remanded for a new decision.

[00:03:43] Speaker 06:
But if the court wanted to do so, I think it could find that based

[00:03:49] Speaker 06:
based on the findings of the court under the correct standard that there is sufficient evidence there.

[00:04:02] Speaker 06:
And once again, I would reiterate that I don't think that the court should go that way, but it can.

[00:04:09] Speaker 06:
The court's basic error

[00:04:14] Speaker 06:
here as to the first question was that it's a reliance on the Supreme Court case of Commissioner v. Jean, which was a post-IGIA amendment case that applied a specific amendment that defined position of the United States for the IGIA statute.

[00:04:36] Speaker 06:
That statute does not apply to 1498.

[00:04:39] Speaker 06:
1498 was amended subsequent to the Aegis statute.

[00:04:45] Speaker 04:
Your basic argument is that we have to understand the history of what happened here.

[00:04:50] Speaker 04:
Correct.

[00:04:50] Speaker 04:
Because you have a whole body of law before Aegis gets amendment in 1986.

[00:04:55] Speaker 05:
Correct.

[00:04:56] Speaker 04:
And that whole body of law teaches us something about pre-litigation conduct, whether it's in or out, right?

[00:05:02] Speaker 05:
Correct.

[00:05:02] Speaker 04:
And specifically, this court's- And then we have an amendment by Congress of Egypt to say, oh, wait a second.

[00:05:08] Speaker 04:
Pre-litigation conduct counts when you're measuring the position of the United States.

[00:05:13] Speaker 04:
They give a subsection of the statute expressly directed to that.

[00:05:18] Speaker 05:
Correct.

[00:05:19] Speaker 04:
A few years, not that many years later, the question comes up about whether or not

[00:05:23] Speaker 04:
One should have attorney's fees in 1498.

[00:05:27] Speaker 05:
Correct.

[00:05:27] Speaker 04:
And so the decision is made, yes, we should have attorney's fees in 1498.

[00:05:32] Speaker 04:
And so the first iteration in the House of Representatives is they'll be, if you have prevailed, they'll be soon.

[00:05:39] Speaker 04:
And the Justice Department comes in and says, wait a second.

[00:05:43] Speaker 04:
You should allow us to be saying that our position was substantially justified.

[00:05:48] Speaker 05:
Right?

[00:05:48] Speaker 05:
Correct.

[00:05:49] Speaker 04:
And so what happened was the whole question of substantial justification, what goes into it, was up in the air.

[00:05:56] Speaker 04:
And Congress chose to use the pre-1986 definition, if you will, is your view, in this statute, rather than simply incorporating all of the amended Egypt into 1498.

[00:06:12] Speaker 06:
That in substance, yes, not in procedure.

[00:06:16] Speaker 06:
But what they did is they used the same language, but without the specific definition, which they knew about and did not employ.

[00:06:25] Speaker 04:
We assumed they knew.

[00:06:27] Speaker 06:
Well, that is the judicial standard.

[00:06:33] Speaker 06:
But I think there's sufficient evidence in the congressional hearing record that they were looking at just the broader concept of substantial justification.

[00:06:49] Speaker 04:
Let's say we want to line it up with Egypt.

[00:06:51] Speaker 06:
I don't think they wanted to necessarily line it up with Egypt totally.

[00:06:55] Speaker 04:
Well, wasn't that when Justice came in to complain?

[00:06:57] Speaker 04:
They said, hey, you've got to line this up with Egypt.

[00:07:00] Speaker 04:
What were the exact words of Justice's letter to, I guess, end of the legislative history that the Senate responded to?

[00:07:14] Speaker 04:
I think they were quoted in Judge Lettow's opinion, I believe.

[00:07:22] Speaker 06:
I'm not sure I have it here easily.

[00:07:25] Speaker 06:
But I would agree with you, Judge Clevenger, that the Justice Department came in and asked for it to be aligned because the provision was even broader than EGIA.

[00:07:42] Speaker 06:
And Justice asked that it come in.

[00:07:44] Speaker 04:
It was broader than EGIA because it didn't take the position of the government into account at all.

[00:07:49] Speaker 06:
Correct.

[00:07:49] Speaker 06:
The original.

[00:07:50] Speaker 06:
It awarded the fees in almost every case.

[00:07:54] Speaker 06:
Right.

[00:07:55] Speaker 06:
And this cut it back.

[00:07:59] Speaker 04:
Isn't the essence of your argument here really that pre-litigation conduct in the context of these kind of cases is sort of like a term of art?

[00:08:08] Speaker 04:
It doesn't mean, as your adversary says, everything that's historic.

[00:08:12] Speaker 05:
That's correct.

[00:08:13] Speaker 04:
You're saying it's a term of art.

[00:08:16] Speaker 04:
And when it arises in each of cases,

[00:08:19] Speaker 04:
It's in the context of the behavior of the agency that took the action that's complained of.

[00:08:24] Speaker 06:
That is correct.

[00:08:25] Speaker 04:
So you're asking, was it arbitrary and capricious?

[00:08:27] Speaker 04:
Was the action really wrong?

[00:08:30] Speaker 04:
And as a result, it meant somebody had to do a whole lot of litigating to get someplace.

[00:08:35] Speaker 06:
That is correct.

[00:08:36] Speaker 04:
It goes a little bit further than that.

[00:08:38] Speaker 04:
You take that background of what pre-litigation conduct is all about, and you swap that into a 1498 cause of action.

[00:08:47] Speaker 04:
You say, shoe doesn't fit.

[00:08:49] Speaker 04:
because nobody cares about the motive of the government in infringing.

[00:08:57] Speaker 04:
Because it's a free shot.

[00:09:00] Speaker 04:
So the kinds of considerations you would take into consideration in a standard Egypt, was the Corps of Engineers correct in denying you the permit to build your house?

[00:09:15] Speaker 06:
Yeah, that is correct.

[00:09:17] Speaker 04:
What was sort of the quality of their behavior?

[00:09:20] Speaker 04:
I mean, did they force someone into a whole lot of work they didn't have to do?

[00:09:25] Speaker 04:
No one cares about that.

[00:09:27] Speaker 05:
Correct.

[00:09:27] Speaker 04:
So you say there's really no room for the concept of pre-litigation conduct to function in an infringement action.

[00:09:37] Speaker 06:
That is true.

[00:09:39] Speaker 06:
We go a little bit further than that, because in this particular case,

[00:09:44] Speaker 06:
the judge actually went to things that wouldn't even be pre-litigation conduct under IJA and went to an example being... Well, that's actually an example of him having gone too far.

[00:09:57] Speaker 06:
Correct.

[00:09:58] Speaker 06:
But he would have gone too far even under Egypt.

[00:10:01] Speaker 03:
What do you think the specific things are that he took into account that went too far?

[00:10:06] Speaker 06:
Well, the three that we mentioned, I think most particularly, I think there are some other things that we just dispute.

[00:10:16] Speaker 06:
But the three in particular that we pointed out were the alleged breach of a nondisclosure agreement at its appendix page 18,

[00:10:28] Speaker 06:
taking sole credit for patented inventions at Oak Ridge Laboratory, which was somehow believed to be a factor.

[00:10:36] Speaker 03:
So is it because these bad acts, arguable bad acts, are not really linked to the position?

[00:10:46] Speaker 03:
We're supposed to be focusing on the position the government took.

[00:10:48] Speaker 03:
The government took a position of non-infringement.

[00:10:50] Speaker 03:
That's what these acts relate to.

[00:10:51] Speaker 07:
Correct.

[00:10:52] Speaker 03:
And so is it because when you say breach of nondisclosure, or I personally am having trouble seeing the link between those pieces of evidence and the position you took of non-infringement, is that the reason?

[00:11:06] Speaker 06:
Yes, that is in part the reason.

[00:11:10] Speaker 03:
Suppose this was the case.

[00:11:11] Speaker 03:
Suppose right before litigation was filed, you all had a flurry of emails back and forth about how you clearly infringed this and have no good faith non-infringement argument.

[00:11:22] Speaker 03:
However, this is a small entity, and we can bully them right out of court.

[00:11:26] Speaker 03:
I know this would never happen.

[00:11:29] Speaker 03:
I'm not suggesting anything to the contrary.

[00:11:31] Speaker 03:
But suppose there's this flurry of emails back and forth, and somehow they become of record ultimately.

[00:11:36] Speaker 03:
And you do, in fact, take the very non-infringement position that in those emails you suggested would be a non-starter.

[00:11:49] Speaker 03:
In litigation, you've taken the position of non-infringement of a specific element.

[00:11:53] Speaker 03:
Would it really be your view that that flurry of emails that may have occurred right before the litigation was filed would not be allowed to be looked at to assess as evidence, are they relevant to assess the position the government did ultimately take and whether it was substantially justified?

[00:12:13] Speaker 06:
As I understand your question, this is a flurry of emails between the plaintiff and the government?

[00:12:21] Speaker 03:
I don't even know who they're between.

[00:12:22] Speaker 06:
I guess the point I'm trying to answer is... The answer is, of course they're relevant, and of course they affected... Not necessarily, Your Honor.

[00:12:29] Speaker 00:
Well, let me just explain why I think they are, and then you can tell me why I'm wrong about that.

[00:12:34] Speaker 00:
Because it's hard to get my... I've had a hard time getting my head around where you draw the line, and it seems to me

[00:12:40] Speaker 00:
that of course you can look at pre-litigation facts to determine whether the litigation position is unjustified.

[00:12:48] Speaker 00:
You just can't make a determination

[00:12:52] Speaker 00:
on the alleged impropriety of the pre-litigation actions themselves.

[00:12:57] Speaker 00:
Is that a fear characterization?

[00:13:00] Speaker 00:
There's a difference.

[00:13:00] Speaker 00:
You can look at pre-litigation facts, right?

[00:13:03] Speaker 06:
You can look at pre-litigation facts that are material.

[00:13:07] Speaker 00:
Yeah, so if you have pre-litigation, if you have the emails described by Judge Moore, that is relevant to whether or not your current litigating position is justified.

[00:13:20] Speaker 06:
No, not not as I understand judge.

[00:13:23] Speaker 04:
Well, let me let me let me refine it a little bit.

[00:13:26] Speaker 04:
What happens if after the patent is issued, the woman that got the patent and she's still having an ongoing gripe with the government and she goes and has a meeting and she sits down with them and says, you know, it really irritates me to beat the band because you're infringing my patent.

[00:13:43] Speaker 04:
And you shouldn't do that.

[00:13:44] Speaker 04:
And the government says, of course we are.

[00:13:47] Speaker 04:
Of course we are.

[00:13:48] Speaker 04:
Everybody knows we're infringing.

[00:13:49] Speaker 04:
We know it.

[00:13:50] Speaker 04:
We're doing it.

[00:13:51] Speaker 04:
Yes, we are.

[00:13:52] Speaker 04:
And that's recorded.

[00:13:54] Speaker 04:
That's a historic fact that's recorded.

[00:13:56] Speaker 04:
And that's the government's pre-litigation conduct saying, we infringe.

[00:14:01] Speaker 04:
And then the government comes to trial and denies infringement.

[00:14:06] Speaker 04:
Should that statement that the woman had her phone, she recorded it, should that be considered as pre-litigation conduct?

[00:14:16] Speaker 06:
I think that can be considered as pre-litigation conduct.

[00:14:23] Speaker 06:
I don't think it can be considered as a position of the United States pre-litigation.

[00:14:29] Speaker 03:
Not the position, but can this kind of evidence, evidence that preceded the date of the litigation itself, can that evidence be used to evaluate whether the position actually taken in litigation is substantially justified or not?

[00:14:46] Speaker 06:
That depends very specifically on the evidence.

[00:14:51] Speaker 06:
A statement, for instance, from an agency person saying we infringe, I don't think that does.

[00:14:59] Speaker 04:
Why isn't that the position in the United States?

[00:15:01] Speaker 04:
Let's assume it's the highest ranking person in the whole place.

[00:15:06] Speaker 04:
So it's a real official officer.

[00:15:08] Speaker 06:
If it's a real official officer, it would.

[00:15:11] Speaker 03:
If it's just some other person, it may not.

[00:15:15] Speaker 03:
Doesn't that just go to the weight of the evidence, what I'm suggesting?

[00:15:19] Speaker 03:
It's not that it can't be the position of the government that no evidence that existed prior to the day of litigation could ever be used to

[00:15:27] Speaker 03:
support an argument that the government's actual litigation position is not substantially justified.

[00:15:34] Speaker 03:
I just can't imagine that's the position.

[00:15:36] Speaker 06:
As in my discussions with Judge Clevenger, I have said that that is the case.

[00:15:42] Speaker 06:
We agree that facts, material facts, are relevant.

[00:15:46] Speaker 03:
Evidence.

[00:15:46] Speaker 03:
Right, evidence.

[00:15:48] Speaker 06:
And they certainly can be evidence.

[00:15:51] Speaker 06:
Now, one of the problems that I am having here is certainly not every person that makes a statement binds the United States.

[00:16:00] Speaker 00:
No, that's a different issue.

[00:16:01] Speaker 06:
We didn't come to that.

[00:16:03] Speaker 06:
But that's kind of underlying where we're going here.

[00:16:07] Speaker 03:
But it's not, because binding the United States is an entirely different question from whether the position is substantially justified or not.

[00:16:14] Speaker 03:
If 1,000 engineers who don't have authority to bind the United States but nonetheless circulate an email chain saying, we infringe because

[00:16:24] Speaker 03:
Our battery really is, in fact, exactly the battery that's claimed.

[00:16:29] Speaker 03:
You know, honestly, it's not whether they bind the government or not, but the mere fact that all of these people thought so might be allowed to be weighed into whether the position that's ultimately taken is just a point.

[00:16:40] Speaker 06:
It certainly might, yes.

[00:16:42] Speaker 06:
I would agree with you there.

[00:16:43] Speaker 06:
It might.

[00:16:44] Speaker 06:
It would not necessarily.

[00:16:46] Speaker 00:
Can I turn to you just a couple of minutes on this amount thing?

[00:16:50] Speaker 00:
Because I think Hensley is a different kind of a case.

[00:16:53] Speaker 00:
I think Farrar is really different.

[00:16:56] Speaker 00:
I mean, here, Hensley is about parsing.

[00:16:59] Speaker 00:
You win on two claims and lose on 48.

[00:17:02] Speaker 00:
What happens with respect to the attorney's fees?

[00:17:05] Speaker 00:
To me, that's not this case, right?

[00:17:07] Speaker 05:
No.

[00:17:08] Speaker 00:
And even Farrar is a little different because it's about compensable injury, and here it was nominal damages.

[00:17:15] Speaker 00:
It seems to me those don't really go nearly as far as you would need to establish that here, I mean, it's not even that she sought $200,000 and she spent $5 million in attorney's fees.

[00:17:29] Speaker 00:
It's she sought an amount that would have justified all of these attorney's fees.

[00:17:34] Speaker 00:
She just went on the merits and lost on the amount.

[00:17:37] Speaker 00:
I don't see how this case comes close to being able to dislodge the attorney's fees because of the differential in the amount.

[00:17:46] Speaker 00:
So you can tell me why I'm wrong.

[00:17:47] Speaker 06:
Well, I think there's two parts to that.

[00:17:49] Speaker 06:
First is that I think that regardless of the context that both Hensley and Farrar require,

[00:17:59] Speaker 06:
indications that the Supreme Court says that scaling is appropriate, that it has to reflect the end result.

[00:18:06] Speaker 00:
Yeah, that's a broad statement, but the context in which it's been applied is not close to what happened here.

[00:18:12] Speaker 06:
The second part of my answer is that in this case in particular, everything over the $200,000 was pretty much stipulated.

[00:18:23] Speaker 06:
Both experts said $200,000.

[00:18:27] Speaker 06:
The rest of it, the court found.

[00:18:29] Speaker 04:
$200,000 based on a theory that if this is your theory, that's what you get.

[00:18:35] Speaker 04:
She had another theory based on which she would get a larger sum.

[00:18:39] Speaker 06:
Correct.

[00:18:39] Speaker 04:
And so the question was, does that theory applicable?

[00:18:43] Speaker 06:
And the court found that this theory had no basis.

[00:18:47] Speaker 04:
I understand that.

[00:18:48] Speaker 04:
But so she lost on that claim.

[00:18:50] Speaker 04:
She got all she could possibly get under the law on the infringement claim.

[00:18:56] Speaker 05:
Right.

[00:18:57] Speaker 04:
And so why wouldn't you say that's a complete victory?

[00:19:00] Speaker 04:
Why are you talking about whittling down the amount of attorney's fees?

[00:19:05] Speaker 06:
Well, because it's not a complete victory.

[00:19:06] Speaker 04:
You might want to try to go in and argue, well, the amount of the fees that she used to argue the theory that she lost on you whittled that out.

[00:19:13] Speaker 04:
But that's not your point on the case law.

[00:19:16] Speaker 06:
No, it's the point.

[00:19:17] Speaker 04:
On the case law, it's simply the size.

[00:19:18] Speaker 04:
She asked for $5 million.

[00:19:20] Speaker 04:
She only got $200,000.

[00:19:21] Speaker 04:
Therefore, you have to whittle down the attorney's fees.

[00:19:25] Speaker 06:
Yes.

[00:19:25] Speaker 06:
And I think it goes a step further here, because part of that $5 million was that the claim itself had no basis.

[00:19:35] Speaker 06:
It was meritless.

[00:19:37] Speaker 06:
So is that a $5 million claim?

[00:19:39] Speaker 03:
The claim wasn't meritless.

[00:19:40] Speaker 03:
Her claim was one of infringement.

[00:19:42] Speaker 03:
And that was actually found to be meritorious.

[00:19:44] Speaker 03:
You're saying her particular argument for that research grant that she lost out on.

[00:19:49] Speaker 06:
Her theory of damages was miraculous.

[00:19:53] Speaker 06:
OK, we're way beyond that.

[00:19:54] Speaker 04:
I understand, Your Honor.

[00:19:55] Speaker 04:
Thank you.

[00:19:55] Speaker 04:
Let me say one thing.

[00:19:56] Speaker 04:
I mean, I found this to be a fascinating issue.

[00:19:58] Speaker 04:
And since all of this in 1498 emanates out of the Takings Clause, I went back and looked at the last five years, 10 years of the government's takings cases in which there have been claims for damages much higher than the person actually got.

[00:20:14] Speaker 04:
And I never saw this argument being made.

[00:20:17] Speaker 04:
I mean, you have a situation where, you know, there's erosion, and the question is, how long has it been going on?

[00:20:22] Speaker 04:
And the plane is taking plane of once the moon, and they get half the moon.

[00:20:28] Speaker 04:
But I never said none of that case law discusses whittling down the size of attorney's fee awards.

[00:20:34] Speaker 06:
Well, I think that's, if I may, Your Honor, I think there's a very specific reason for that.

[00:20:41] Speaker 06:
In IJA itself, for takings claims, there is a different standard.

[00:20:47] Speaker 06:
And the standard is, who gets their fees is based on whether you're closer to the amount claimed or the government's amount.

[00:20:58] Speaker 06:
And it's pretty much a buy.

[00:21:01] Speaker 06:
Thank you.

[00:21:01] Speaker 06:
Thank you.

[00:21:01] Speaker 06:
Yeah, thank you.

[00:21:10] Speaker 02:
Good afternoon.

[00:21:11] Speaker 02:
May it please the court.

[00:21:13] Speaker 02:
Your honors, this case presents the exact circumstances that 1498 was amended to address.

[00:21:20] Speaker 02:
They inserted the fee-shifting provision in 1996 to protect small companies like Miss Walker and other companies who were forced to pursue a claim against the government

[00:21:31] Speaker 02:
in combat the resources of the federal government.

[00:21:35] Speaker 02:
This is exactly why Ms.

[00:21:37] Speaker 02:
Walker was able to pursue her claim in this case as a result of the amendment to the statute.

[00:21:43] Speaker 03:
If the government had made its fee reduction argument not on the theory of 200 versus 500, therefore she should get one twentieth of the attorney's fees, but rather had said she should only get the attorney's fees

[00:22:00] Speaker 03:
that were devoted to the issues upon which she prevailed.

[00:22:04] Speaker 03:
What would you say in response to that argument?

[00:22:07] Speaker 02:
Judge Leto specifically addressed that in his opinion, Your Honor, in Appendix 25.

[00:22:12] Speaker 02:
And he says, the status of the research funding represented a subset of the damages aspect of the infringement claim.

[00:22:20] Speaker 02:
In the next sentence, he said, arguments focused on the status of research funding did not present a distinct claim, nor was the issue sufficiently significant

[00:22:30] Speaker 02:
to warrant identifying and eliminating costs associated with that subset.

[00:22:35] Speaker 02:
No, no.

[00:22:35] Speaker 03:
That's not what I asked you.

[00:22:37] Speaker 03:
I didn't.

[00:22:37] Speaker 03:
I wasn't asking you about the facts of this case.

[00:22:40] Speaker 03:
I have no qualms with Judge Leto's extremely well-written and thoroughly articulated opinion.

[00:22:45] Speaker 02:
I misunderstood your question.

[00:22:46] Speaker 02:
I apologize.

[00:22:47] Speaker 03:
What I was trying to ask you is, would you agree under the law that if

[00:22:53] Speaker 03:
it were if you were able to parse out like suppose your attorney billable records said you know here's the time I spent on infringement for claim one here's the time I spent on infringement for claim two here's the and you only prevailed on claim one and didn't prevail on claim two would it have been fair of the government to ask for a proportional

[00:23:16] Speaker 03:
Award of fees based on the issues upon which you prevail.

[00:23:20] Speaker 02:
I'm sorry misunderstood your question before in in direct respect in this particular case No, your honor and here's why because the cases that support but but but I understand you say in this case No, you acknowledge and accept then that the statute doesn't require all or nothing No, what I'm what I'm suggesting is you have to look at in this particular case There was a single claim and that was a claim for infringement

[00:23:46] Speaker 02:
We prevailed on that claim.

[00:23:48] Speaker 03:
We... Okay, I'm going to try for a third time.

[00:23:51] Speaker 02:
I guess I don't understand.

[00:23:51] Speaker 03:
I'm just going to give up.

[00:23:53] Speaker 03:
Isn't it possible if there were more than one claim.

[00:23:56] Speaker 03:
It's a hypothetical.

[00:23:56] Speaker 03:
And you didn't win on all of them.

[00:23:59] Speaker 07:
Yes.

[00:23:59] Speaker 03:
That the government would be entitled to dispute your entire fee award and say you should only get the proportion that was directed to the actual claim that you prevailed on and not the portions of your fees spent on the claims you didn't prevail on.

[00:24:14] Speaker 02:
that has never been addressed in 1498.

[00:24:17] Speaker 02:
But applying the others, I agree.

[00:24:19] Speaker 02:
I agree that that is a possibility if the facts were presented.

[00:24:23] Speaker 00:
Well, that's what Hensley was, the Supreme Court case, where they say if you've got multiple claims and you only prevail on some of them, quote,

[00:24:30] Speaker 00:
where they failed to prevail on a claim that is distinct in all respects from his successful claims, the hours spent on the unsuccessful claim should be excluded from the attorney's visa award.

[00:24:40] Speaker 00:
I think that's your hypothetical.

[00:24:42] Speaker 03:
I know.

[00:24:42] Speaker 00:
I was just trying to get him to say it.

[00:24:44] Speaker 00:
I know.

[00:24:45] Speaker 00:
Then I misunderstood, and I apologize.

[00:24:46] Speaker 00:
Right, and unsuccessfully.

[00:24:48] Speaker 02:
I want to talk briefly about the government's raising about the position of the United States being substantially justified.

[00:24:59] Speaker 02:
In this particular case, we've not disputed nor ever disputed that the position of the United States that is to be evaluated is the positions that were taken in the litigation.

[00:25:09] Speaker 02:
In this particular case, non-infringement and invalidity.

[00:25:13] Speaker 02:
And that's what Judge Leto examined to determine whether or not those positions were substantially justified.

[00:25:19] Speaker 02:
And in doing that, he went back and he looked at the underlying facts.

[00:25:25] Speaker 02:
And he applied the standard that's also not in dispute, namely whether or not the government's positions, non-infringement and invalidity, had a reasonable basis in fact and law.

[00:25:36] Speaker 02:
And he went back and he looked at the underlying facts that gave rise to the infringement.

[00:25:40] Speaker 02:
And specifically what he looked at is he looked at when Miss Walker went and she went to Oak Ridge to solicit their help.

[00:25:48] Speaker 02:
She had this idea and she needed some help to try to prove that it worked so she could commercialize it.

[00:25:53] Speaker 02:
She went there and she disclosed it to them.

[00:25:56] Speaker 02:
She was concerned about the secrecy, ironically, because she wanted to make sure that they wouldn't take it.

[00:26:01] Speaker 02:
But they changed the focus.

[00:26:04] Speaker 02:
Dr. Lugge, in particular, changed the focus of his invention from that time as single energy to after receiving her invention, changed the focus to two energies, magnet and thermal, with the thermal introducing an oscillatory energy that made the magic happen.

[00:26:22] Speaker 02:
And that's what Judge Leto was referring to in terms of they took that, took credit for it, went and secured and applied for industry awards about the two energies and the oscillatory, went and published articles.

[00:26:36] Speaker 02:
And then they come to this isn't a case where they came to trial and they said, you're right.

[00:26:41] Speaker 02:
We took it.

[00:26:42] Speaker 02:
Let's talk about how much this is worth.

[00:26:45] Speaker 02:
It's akin to like an eminent domain case, I would think, where the

[00:26:49] Speaker 02:
government comes and tears the person's house down, and instead of talking about what they owe him for the destruction, they say, well, you need to prove that we did it.

[00:26:59] Speaker 02:
So they spend many years trying to prove what everybody knows that the government tore down the house.

[00:27:05] Speaker 02:
And that's the same here.

[00:27:07] Speaker 02:
Judge Lido had a front row seat to watching the government make us prove

[00:27:14] Speaker 02:
what everybody knew and what all the undisputed facts and evidence showed that Oak Ridge was using an oscillatory energy source, which was their principal non-infringement argument at trial.

[00:27:28] Speaker 02:
And also, as Your Honors noted earlier,

[00:27:31] Speaker 02:
The arguments that they were presented at trial were in direct contradiction and relied on a rejected claim construction that Judge Leto had interpreted three years previously.

[00:27:43] Speaker 02:
So they spent the next three years including at trial not only presenting arguments that had no basis, but they were expressly premised on claim construction arguments that Judge Leto had considered and rejected three years previously.

[00:28:00] Speaker 02:
The government standards where they say, we don't want you to look at any of the underlying facts, is essentially a change in the standard.

[00:28:07] Speaker 02:
They want to be able to come and say, so long as we present.

[00:28:10] Speaker 04:
They're not saying, we don't want you to look at any of the underlying facts.

[00:28:13] Speaker 04:
That's where the ships are crossing in the night between you and the government.

[00:28:17] Speaker 04:
The government realizes that historic facts

[00:28:21] Speaker 04:
in order to prove infringement.

[00:28:23] Speaker 04:
Did the agency do X, Y, and Z and are involved?

[00:28:27] Speaker 04:
But the government's saying pre-litigation conduct has a special feeling or term of art in this field.

[00:28:35] Speaker 04:
And it really goes to the morality, the propriety of the agency's conduct.

[00:28:42] Speaker 04:
So what the government is in essence saying is that if this case had been tried before each got amended,

[00:28:51] Speaker 04:
to include pre-litigation conduct, how much of what Lettow said would not have come in?

[00:29:00] Speaker 04:
If you see what I mean?

[00:29:01] Speaker 02:
No, I understand.

[00:29:01] Speaker 04:
And so some of what he's talking about, he had the view that filing a patent application is an infringing act.

[00:29:09] Speaker 04:
So he said filing the application, writing the papers, these are all things to consider about whether or not the government was reasonable when it came in and said we don't infringe or it's invalid.

[00:29:21] Speaker 02:
Yeah, and I understand that, Your Honor.

[00:29:22] Speaker 04:
And I guess what I would say is that if you look at why the EJA Act was amended in 1986, it was to resolve a circuit split to see whether or not the agency's position or lack of- And the majority of the circuits have said the agency's position does not include the bona fides of its arbitrary or capricious or not behavior at the agency level.

[00:29:47] Speaker 04:
So they amended the statute to include that body of behavior.

[00:29:51] Speaker 02:
Correct, but it didn't change the fact that EAJA cases both before 1986 and after are required to look at as part of the analysis of whether or not conduct or positions are substantially is to look at the pertinent facts.

[00:30:07] Speaker 04:
Right, but I mean your case from our circuit where we say you have to look at all the facts, that's a case in which we held you don't look at pre-litigation conduct.

[00:30:17] Speaker 04:
So there's a difference between for all the facts and then peeling out in this obscure context of attorney's fee suits, the pre-litigation conduct that either counts or doesn't count.

[00:30:31] Speaker 02:
Yeah.

[00:30:32] Speaker 02:
And in this particular case, Judge Leto, the violation of the non-disclosure agreement that counsel referenced

[00:30:41] Speaker 02:
is not something that Judge Leto relied on in analyzing whether the positions of the United States had- Well, that's debatable.

[00:30:49] Speaker 04:
I mean, the chief judge raised that question with your adversary at the very beginning, and you heard what he said, which was, even if we agree with him on the statutory interpretation, there's enough to affirm, meaning your client wins.

[00:31:03] Speaker 04:
The difficulty for us is more, because of that concession, is more for future cases,

[00:31:10] Speaker 04:
or what happens with litigation for clients like your plaintiff client in the future, whether they'll get the benefit in their own case of pre-litigation conduct to help them to show not substantially justified or not.

[00:31:24] Speaker 04:
And the thing that Judge Lettow's opinion didn't do, which we've done it today here at oral argument, is to trace the history of how 1498 got amended and what was the intent of Congress, whether to include or exclude.

[00:31:39] Speaker 02:
And I think, I guess the easiest way that I have looked at it, Your Honor, and obviously I can candidly say that my familiarity with the EAJA is not as in-depth as counsel's.

[00:31:53] Speaker 02:
Sometimes that's very helpful.

[00:31:56] Speaker 02:
is required under the EAJA before you file a claim, was there was a separate agency proceeding.

[00:32:03] Speaker 02:
And that does not exist or is not required under 1498.

[00:32:07] Speaker 02:
And part of amendment to the EAJA is to resolve the circuit split, but it was also to make clear that not only was the claimant entitled to fees

[00:32:18] Speaker 02:
For the litigation if the conduct was not substantially justified it was also entitled to claim fees and costs or recoup themes and costs associated with the prior agency proceeding so it wouldn't have made sense in my view to incorporate similar language into 1498 because there's just not that obligation or that proceeding and

[00:32:39] Speaker 03:
Can I ask a question?

[00:32:40] Speaker 03:
So, I mean, one of the things that has confused me is the difference between pre-litigation conduct on the one hand, which I don't see why that wouldn't be able to be considered, and then pre-litigation positions of the United States.

[00:32:56] Speaker 03:
Do you understand what I'm getting at?

[00:32:58] Speaker 03:
I don't, the one thing about Judge Leto's opinion that caused me to pause is at page A16 where he's distinguishing under EJA between the position taken in civil litigation and, quote, the action or failure to act by the agency upon which the civil action is based.

[00:33:17] Speaker 03:
So, I mean, and let me be clear, I think you win either way.

[00:33:23] Speaker 03:
It's important for future cases for us to make sure we get the law right.

[00:33:27] Speaker 03:
I don't see why he isn't correct that pre-litigation conduct can be considered.

[00:33:33] Speaker 03:
However, a pre-litigation position of the government is not to be considered.

[00:33:37] Speaker 02:
And I think the challenge, at least for me, is that their brief kind of intertwined those two.

[00:33:42] Speaker 02:
But I agree.

[00:33:43] Speaker 02:
I make a distinction.

[00:33:44] Speaker 03:
But I mean, it doesn't matter to me.

[00:33:45] Speaker 03:
In fact, what their brief says, I'm trying to make sure we get the law right.

[00:33:48] Speaker 03:
Understand.

[00:33:50] Speaker 03:
EJA may allow for a pre-litigation position to cause them a problem, and I don't see that this statute does, but that to me, and that's why I want to make sure it's clear, is wholly different from pre-litigation conduct that might inform whether the position they do take in litigation.

[00:34:07] Speaker 03:
is substantially justified.

[00:34:08] Speaker 02:
I don't know where you can possibly draw the line on pre-litigation conduct.

[00:34:14] Speaker 02:
Things that are not a position, whether it be an agency, I don't know where you draw that line and say, this is not a position.

[00:34:21] Speaker 03:
Well, they had to have taken a position in litigation.

[00:34:23] Speaker 02:
I'm sorry?

[00:34:24] Speaker 03:
They have to have taken the position and litigation.

[00:34:26] Speaker 02:
Correct.

[00:34:26] Speaker 03:
But if you're trying... But IJA doesn't seem to require that, right?

[00:34:29] Speaker 03:
The IJA statute seems to allow for, I think, more than that.

[00:34:32] Speaker 02:
Yes.

[00:34:33] Speaker 02:
As amended, the IJA statute is broader.

[00:34:35] Speaker 02:
Right.

[00:34:35] Speaker 02:
There's no question.

[00:34:36] Speaker 02:
And it specifically makes clear something that is not specifically spelled out in 1498, but the legislative history

[00:34:45] Speaker 02:
of when they put 1498 in place, the amendments to the EAJA were there.

[00:34:51] Speaker 02:
And as I think Your Honor referred to the letter from the DOJ previously that basically said this should be amended to be consistent and interpreted with the EAJA.

[00:35:02] Speaker 02:
And so I think the explanation is... Yet they didn't do it.

[00:35:06] Speaker 02:
Well, but again, I don't know that there's a reason to put in that different sentence in the 1498 that's in the EAJA because it's... In the definitional sentence that's in a totally different step?

[00:35:16] Speaker 02:
Oh, the position of the United States.

[00:35:18] Speaker 03:
Oh, yeah.

[00:35:18] Speaker 02:
That's right.

[00:35:19] Speaker 02:
But I do think also that...

[00:35:22] Speaker 02:
It is also putting that in would be inconsistent in the sense that the EAJA has a requirement that is not required under 1498 to have this agency review and to have that position there that is not part of or required in 1498.

[00:35:40] Speaker 04:
You're not suggesting there's going to be a gap in the litigation and this is a Chevron type case, are you?

[00:35:49] Speaker 02:
I don't think so.

[00:35:50] Speaker 04:
I mean, I don't know.

[00:35:50] Speaker 04:
I mean, what did Congress intend when it amended 1498?

[00:35:56] Speaker 04:
I mean, there's a history version that favors the government's point of view a little bit, and then you've got your point of view from driven by policy considerations.

[00:36:11] Speaker 01:
Yeah, I mean, I think it's a

[00:36:14] Speaker 04:
I think the challenge... I mean, it's a toss-up for us because the government doesn't have an established position on this point, so there's nothing we would defer to here by way of an agency interpretation.

[00:36:24] Speaker 04:
In the fallback, in that case, as you go back to pre-chevron, we do the analysis.

[00:36:31] Speaker 02:
Yeah, I mean, I think going back to the previous question about trying to define and distinguish between... I think the answer lies in the distinction between pre-litigation position

[00:36:43] Speaker 02:
in pre-litigation conduct.

[00:36:45] Speaker 02:
I mean, I think that if you have a pre-litigation position.

[00:36:49] Speaker 04:
Doesn't the amendment to IJA amend the words the position of the government?

[00:36:56] Speaker 02:
Yes.

[00:36:56] Speaker 04:
So they say the position of the government shall be, and then shall include this basically the agency action, right?

[00:37:04] Speaker 02:
Correct.

[00:37:06] Speaker 02:
And I think that that is really the only distinction between the two statutes is spelling out

[00:37:13] Speaker 02:
what can be included with respect to agency positions.

[00:37:17] Speaker 02:
But either way, pre-litigation conduct is appropriate, given that it has always been considered with the body of cases interpreting the EAJA before it was amended in 1986.

[00:37:31] Speaker 04:
And it has been been to- But not all.

[00:37:33] Speaker 04:
In the cases in the circuits and the majority of the circuits before the amendment of EJA, certain forms of historic

[00:37:41] Speaker 04:
pre-litigation conduct were considered inappropriate for determining the position of the United States.

[00:37:47] Speaker 02:
It has to be.

[00:37:47] Speaker 02:
I think that goes to Judge Moore's question about how you define what pre-litigation conduct is versus a pre-litigation position.

[00:37:54] Speaker 02:
I mean, my view is that pre-litigation conduct that is utilized to evaluate whether or not the position of the United States in litigation is reasonable in fact, that that has to be considered.

[00:38:11] Speaker 02:
that has always been considered under the law.

[00:38:13] Speaker 04:
In the case law that I read that leads up to this, that deals with the question of the pre-litigation activity, where the government lost because of pre-litigation activity, whereas they were reasonable in court, was not position taking, but it was behavior driven by a corps of engineers and people like that, just acting arbitrary and capricious.

[00:38:40] Speaker 04:
in the way they treated the party that then had to go to court to seek the relief.

[00:38:47] Speaker 04:
I'm not certain that helps.

[00:38:48] Speaker 02:
See my time is up.

[00:38:49] Speaker 04:
Thank you, Your Honor.

[00:38:57] Speaker 06:
I believe my time has probably expired as well.

[00:39:01] Speaker 00:
You've got some time.

[00:39:03] Speaker 06:
I just had a couple quick points, if I could.

[00:39:07] Speaker 06:
To Judge Moore's point regarding pre-litigation conduct versus positions, I think basically our position is that the two collapse here because

[00:39:21] Speaker 06:
There are three elements to a 1498 claim, infringement, validity, and damages.

[00:39:27] Speaker 06:
The material facts of those are certainly always at play.

[00:39:32] Speaker 06:
The conduct of the agency, however, and how they treat the claimant, what they have done maybe in the past or whether they have claimed papers in their own name or things of that nature are certainly acts that

[00:39:50] Speaker 06:
that are pre-litigation conduct, but they are also usually coming in as positions.

[00:39:55] Speaker 03:
Exactly.

[00:39:55] Speaker 03:
And those positions, to the extent they're being used as positions, they shouldn't be part of this.

[00:40:02] Speaker 03:
But if inherent in them somehow they shed light on whether there was a substantial justification for an actual non-infringement position taken in trial, they could be considered.

[00:40:14] Speaker 03:
as pieces of evidence, not as positions.

[00:40:17] Speaker 06:
Yes, if they are a material fact to the case.

[00:40:20] Speaker 06:
Yes, I don't disagree with you there.

[00:40:24] Speaker 04:
That's your way of saying that you'd still like us to say that the pre-litigation position doesn't include the pre-litigation conduct.

[00:40:35] Speaker 06:
I'm sorry.

[00:40:36] Speaker 06:
I think I missed the first part of the question.

[00:40:38] Speaker 04:
Well, I mean, you're not

[00:40:41] Speaker 04:
You're not giving away your position in the main on the statutory interpretation.

[00:40:46] Speaker 04:
Correct.

[00:40:46] Speaker 04:
Right?

[00:40:47] Speaker 04:
You're still saying we should say that Judge Letow was wrong when he said position of the United States includes sort of all forms of pre-litigation conduct.

[00:40:57] Speaker 00:
That is correct.

[00:40:58] Speaker 00:
Yes.

[00:40:58] Speaker 00:
OK, and I was wrong because you were out of time, as you correctly observed.

[00:41:04] Speaker 00:
I suspected as much, Your Honor.

[00:41:05] Speaker 06:
Thank you.

[00:41:07] Speaker 06:
Just if I may, just in closing, say we think that Broad Avenue, this court's prior decision, was correct and would rely on that.

[00:41:15] Speaker 06:
Thank you.

[00:41:16] Speaker 06:
Thank you.

[00:41:16] Speaker 06:
Thank you.

[00:41:17] Speaker 06:
We thank both sides.

[00:41:18] Speaker 06:
Case is submitted.

[00:41:19] Speaker 06:
That concludes our proceeding.