De Graffenried v. United States

29 Fed. Cl. 384, 1993 U.S. Claims LEXIS 164, 1993 WL 389967
CourtUnited States Court of Federal Claims
DecidedOctober 4, 1993
DocketNo. 541-80C
StatusPublished
Cited by8 cases

This text of 29 Fed. Cl. 384 (De Graffenried v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
De Graffenried v. United States, 29 Fed. Cl. 384, 1993 U.S. Claims LEXIS 164, 1993 WL 389967 (uscfc 1993).

Opinion

OPINION

ANDEWELT, Judge.

In this patent action filed pursuant to 28 U.S.C. § 1498(a), plaintiff Albert L. de Graffenried, sought compensation from the United States for the unauthorized use of United States Patent No. 3,217,598 (the ’598 patent). The ’598 patent covers a system used for controlling “runout,” i.e., misalignment of a cutting tool during deep boring operations. In two prior decisions, this court concluded that defendant is liable for the unauthorized use of plaintiff’s patent, De Graffenried v. United States, 20 Cl.Ct. 458 (1990) (De Graffenried I), and awarded “reasonable and entire compensation” for such unauthorized use, De Graf-fenried v. United States, 25 Cl.Ct. 209 (1992) (De Graffenried II). This action is presently before the court on plaintiff’s application for fees and expenses under the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412.

The EAJA permits this court, under specified conditions, to grant fees and expenses to a “prevailing party” in a suit against the United States. Herein, defendant contends that plaintiff is not a “prevailing party” and that, in any event, even assuming plaintiff is a “prevailing party,” plaintiff has not satisfied the statutory prerequisites for such an award. For the reasons set forth below, this court concludes that plaintiff is a “prevailing party,” but plaintiff has not satisfied the EAJA prerequisites for an award of fees and expenses.

[386]*386I.

Pursuant to a stipulation submitted by the parties after the court’s decision in De Graffenried II, the court granted plaintiff an award, including delay damages, of approximately $542,000. Notwithstanding this substantial damage award, defendant contends that plaintiff is not a “prevailing party” because an action brought under 28 U.S.C. § 1498(a) is an “eminent domain proceeding” and plaintiff does not qualify as a prevailing party in such a proceeding under the definition contained in 28 U.S.C. § 2412(d)(2)(H). Section 2412(d)(2)(H), provides:

“[PJrevailing party,” in the ease of eminent domain proceedings, means a party who obtains a final judgment (other than by settlement), exclusive of interest, the amount of which is at least as close to the highest valuation of the property involved that is attested to at trial on behalf of the property owner as it is to the highest valuation of the property involved that is attested to at trial on behalf of the Government.

Excluding delay damages, the court awarded plaintiff approximately $89,000. Defendant’s expert testified at trial, in effect, that an appropriate award, excluding delay damages, was approximately $70,000, and plaintiff’s expert testified that an appropriate award, in effect, was in the order of $5-16 million. Clearly, defendant’s expert’s highest valuation is much closer than plaintiff’s expert’s to the court’s ultimate damage award. Therefore, if plaintiff’s action under 28 U.S.C. § 1498(a) is an “eminent domain proceeding,” then plaintiff would not be a “prevailing party” within the meaning of 28 U.S.C. § 2412(d)(2)(H) and, hence, would not be entitled to recover fees and expenses.

II.

Section 1498(a) does not anywhere state that an action thereunder constitutes an “eminent domain proceeding.” It provides, in pertinent part:

Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture.

To support its position that an action under Section 1498(a) does constitute an “eminent domain proceeding,” defendant cites a series of cases in which courts have resorted to eminent domain precedent when calculating “reasonable and entire compensation” under Section 1498(a). Leesona Corp. v. United States, 220 Ct.Cl. 234, 251-52, 599 F.2d 958, 969, cert. denied, 444 U.S. 991, 100 S.Ct. 522, 62 L.Ed.2d 420 (1979); Pitcairn v. United States, 212 Ct.Cl. 168, 189-97, 547 F.2d 1106, 1120-24 (1976); Tektronix v. United States, 213 Ct.Cl. 257, 268, 552 F.2d 343, 349 (1977). Perhaps the strongest support for defendant’s argument is found in Leesona, in which the Court of Claims concluded that treble damages, which are available against private parties in a patent infringement action, are not available against the government in a Section 1498(a) action for unauthorized use of a patent. Therein, the court made the following comments concerning the relationship between Section 1498(a) and eminent domain:

The theory for recovery against the government for patent infringement is not analogous to that in litigation between private parties. When the government has infringed, it is deemed to have “taken” the patent license under an eminent domain theory, and compensation is the just compensation required by the fifth amendment.
* Sfc * * % *
28 U.S.C. § 1498 ... is essentially an Act to authorize the eminent domain taking of a patent license, and to provide just compensation for the patentee____

220 Ct.Cl. at 244, 246, 599 F.2d at 964, 966.

These statements, however, are not controlling in the instant action because they constitute dicta, and, in any event, do not [387]*387address the precise issue raised herein. While the Leesona court indicated that Section 1498 was founded upon “an eminent domain theory ” (emphasis added) and was “essentially an Act to authorize the eminent domain taking of a patent license” (emphasis added), the court did not purport to interpret 28 U.S.C. § 2412(d)(2)(H) and, hence, did not address whether a Section 1498(a) action is an “eminent domain proceeding” thereunder.

Because there appears to be no controlling precedent on point, it falls on this court to interpret the reach of the phrase “eminent domain proceeding” in Section 2412(d)(2)(H). Upon consideration, although plausible arguments can be made on both sides of the issue, the far more compelling argument is that Section 1498(a) actions are not “eminent domain proceedings” and, hence, the definition of “prevailing party” in Section 2412(d)(2)(H) does not apply.

The argument in favor of viewing Section 1498(a) actions as “eminent domain proceedings” under Section 2412(d)(2)(H) proceeds essentially as follows.

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Cite This Page — Counsel Stack

Bluebook (online)
29 Fed. Cl. 384, 1993 U.S. Claims LEXIS 164, 1993 WL 389967, Counsel Stack Legal Research, https://law.counselstack.com/opinion/de-graffenried-v-united-states-uscfc-1993.