Attorneys Fees and Costs Under An Agreement are Not Limited by Statute

Monsanto Company v. David, [2007-1104](February 5, 2008) [LOURIE, Bryson, Moore] The Federal Circuit affirmed that the ’605 patent was infringed, but because portions of the damages award were clearly erroneous, we affirmed in part, vacated in part, and remanded.
BRIEF: The trial court held that David had willfully infringed the ’605 patent and breached the Technology Agreement by planting saved seed from a prior year’s crop. A damages award of $226,214.40 was entered in favor of Monsanto. The court further awarded Monsanto an additional $10,000 in enhanced damages in lieu of treble damages, and attorney fees in the amount of $323,140.05, costs in the amount of $164,608.03 pursuant to the Technology Agreement, or alternatively in the amount of $30,542.99 pursuant to 28 U.S.C. § 1920, and prejudgment interest in the amount of $63,026.95, for a total of $786,989.43.
The Federal Circuit said that it reviews the district court’s damages decision for an "erroneous conclusion of law, clearly erroneous factual findings, or a clear error of judgment amounting to an abuse of discretion."
The Federal Circuit agreed with Monsanto that the district court’s decision to award attorney fees was not an abuse of discretion. David knew that saving seed was a violation of the Technology Agreement, yet he did so anyway. He attempted to cover up his infringement and deceive Monsanto. This Federal Circuit said this was not a case of a farmer unknowingly infringing a patent, rather it was a case of a farmer with apparent disregard for patent rights, license agreements, and the judicial process. Accordingly, the Federal Circuit agreed with the district court that this is an "exceptional" case, and found that awarding of attorney fees was within the discretion of the district court. The Federal Circuit also rejected David’s argument that the attorney fees and costs stipulated to in the Technology Agreement are limited by statute. 35 U.S.C. § 285 awards attorney fees to patent holders like Monsanto, but the Technology Agreement here also does. Having violated the Technology Agreement, there is no reason why its attorney fee provision cannot be enforced. Similarly, 28 U.S.C. § 1920 does not set maximum costs around which private parties may not contract, it merely limits the amount that federal courts may tax as costs in the absence of "explicit statutory or contractual authorization to the contrary." The Federal Circuit did find that the award of costs under both the Agreement and under § 1920 would be duplicative. The Federal Circuit also rejected David's challenges the reasonable royalty rate, rejecting the use of the technology fee under the Agreement. The Federal Circuit agreed with David that the court erred in calculating the amount of infringement, and remanded for further calculation.