The U.S. Court of Appeals for the Federal Circuit issued a nonprecedential decision Tuesday affirming AeroVironment, Inc.'s victory in a patent infringement dispute with inventors Paul and David Arlton, while also upholding the denial of attorney fees to the defense contractor.
The Federal Circuit affirmed the U.S. District Court for the Central District of California's grant of summary judgment in favor of AeroVironment. The district court had held that AeroVironment could not be held liable for patent infringement because the company's affirmative defense under 28 U.S.C. § 1498 covered all of its alleged infringing activities.
Section 1498 of Title 28 provides immunity from patent infringement liability for contractors working on behalf of the federal government. The statute allows the government and its contractors to use patented inventions without permission when acting for the government, limiting the patent holder's remedy to compensation from the United States rather than damages from the contractor.
The case centers on U.S. Patent No. 8,042,763, titled "Rotary Wing Vehicle," which the Arltons invented and co-own. The patent pertains to a rotary wing vehicle featuring an "elongated tubular backbone" and counter-rotating elements, according to court documents.
Paul and David Arlton had sued AeroVironment for patent infringement, alleging the company unlawfully used their patented rotary wing vehicle technology. The inventors sought damages and other relief against the California-based defense technology company, which specializes in unmanned aircraft systems and other defense technologies.
AeroVironment successfully argued that its activities were protected under the government contractor immunity provision. The district court agreed, finding that all of AeroVironment's allegedly infringing activities fell within the scope of its government contract work, thereby shielding the company from liability under § 1498.
The Federal Circuit's decision, issued by Circuit Judge Alan Stark and joined by Chief Judge Kimberly Prost and Circuit Judge Timothy Cunningham, upheld this determination. The appeals court found that the district court correctly applied the government contractor immunity defense.
However, the Federal Circuit also affirmed the district court's denial of AeroVironment's motion for attorney fees. AeroVironment had cross-appealed this aspect of the lower court's ruling, seeking to recover legal costs incurred in defending against the patent infringement claims.
The case involved multiple appeals spanning several years, with case numbers 2021-2049, 2024-1084, and 2024-1159. The litigation originated in 2020 when the Arltons filed their complaint in the Central District of California before Judge Andre Birotte Jr.
The U.S. Department of Justice participated in the proceedings as amicus curiae, represented by attorneys from the Civil Division including Caroline Tan, Brian Boynton, and Bradley Hinshelwood. The government's participation underscores the significance of the case for federal contracting relationships and the application of § 1498 immunity.
The Arltons were represented by attorneys from Barnes & Thornburg LLP, including Deborah Pollack-Milgate who argued before the Federal Circuit, along with Heather Repicky and Ronald Waicukauski from Williams Law Group. AeroVironment's legal team included Scott Felder from Wiley Rein LLP, who presented oral arguments, alongside Scott McCaleb and Wesley Weeks.
The Federal Circuit's ruling carries particular weight in patent law, as this specialized appellate court handles most patent appeals from federal district courts nationwide. While this decision is nonprecedential, meaning it cannot be cited as binding authority in future cases, it provides guidance on how courts apply government contractor immunity in patent disputes.
The decision reflects the ongoing tension between patent rights and government contracting needs. Section 1498 serves to protect government contractors from patent infringement liability when working on federal projects, ensuring that national defense and other government interests can proceed without patent-related delays or costs.
For inventors like the Arltons, the ruling demonstrates the challenges of enforcing patent rights against companies working under government contracts. While § 1498 does not eliminate compensation entirely, it limits patent holders to seeking remedies against the United States government rather than pursuing potentially more lucrative damages against individual contractors.
The case also highlights AeroVironment's role as a significant defense contractor. The company, headquartered in Arlington, Virginia, develops unmanned aircraft systems and other technologies for military and commercial applications. Its work often involves government contracts that could trigger § 1498 protections.
The affirmation of both the summary judgment and the denial of attorney fees suggests the Federal Circuit viewed this as a straightforward application of existing law rather than a case warranting fee-shifting. The court's brief affirmation indicates agreement with the district court's analysis on both the merits and the attorney fee determination.