Paul E. Arlton, David J. Arlton v. Aerovironment, Inc.

Note: This disposition is nonprecedential
United States Court of Appeals
for the Federal Circuit
______________________
PAUL E. ARLTON, DAVID J. ARLTON,
Plaintiffs-Appellants
v.
AEROVIRONMENT, INC.,
Defendant-Cross-Appellant
______________________
2021-2049, 2024-1084, 2024-1159
______________________
Appeals from the United States District Court for the
Central District of California in No. 2:20-cv-07438-AB-
GJS, Judge Andre Birotte, Jr.
______________________
Decided: February 4, 2026
______________________
DEBORAH POLLACK-MILGATE, Barnes & Thornburg
LLP, Indianapolis, IN, argued for plaintiffs-appellants.
Also represented by HEATHER B. REPICKY, Boston, MA;
RONALD J. WAICUKAUSKI, Williams Law Group, LLC, Indi-
anapolis, IN.
SCOTT A. FELDER, Wiley Rein, LLP, Washington, DC,
argued for defendant-cross-appellant. Also represented by
SCOTT M. MCCALEB, WESLEY EDENTON WEEKS.
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ARLTON v. AEROVIRONMENT, INC. 2
CAROLINE W. TAN, Civil Division, United States De-
partment of Justice, Washington, DC, argued for amicus
curiae United States. Also represented by BRIAN M.
BOYNTON, BRADLEY HINSHELWOOD.
______________________
Before PROST, CUNNINGHAM, and STARK, Circuit Judges.
STARK, Circuit Judge.
Paul and David Arlton (the “Arltons”) appeal from the
district court’s grant of summary judgment, holding that
AeroVironment, Inc. (“AeroVironment”) could not be held
liable for the patent infringement alleged in the Arltons’
complaint as AeroVironment’s affirmative defense under
28 U.S.C. § 1498 covered all of its alleged infringing activ-
ities. AeroVironment cross-appeals the district court’s de-
nial of its motion for attorneys’ fees. We affirm.
I
The Arltons are the inventors and co-owners of U.S. Pa-
tent No. 8,042,763 (“’763 patent”), entitled “Rotary Wing
Vehicle,” which pertains to a rotary wing vehicle with an
“elongated tubular backbone” and “a counter-rotating coax-
ial rotor system.” J.A. 40. The Arltons licensed the ’763
patent to their company, Lite Machines Corporation (“Lite
Machines”), which produced Unmanned Aerial Vehicles
(“UAVs”) allegedly embodying claim 1 of the patent.
Beginning in 2005, the Navy, Air Force, and Special
Operations Command awarded contracts to Lite Machines
pursuant to the Small Business Innovation Research
(“SBIR”) and Small Business Technology Transfer
(“STTR”) programs, which are governed by a statute, 15
U.S.C. § 638. Consistent with § 638, SBIR and STTR con-
tracts are awarded in three phases: Phase I, which involves
“determining . . . the scientific and technical merit and fea-
sibility of ideas that appear to have commercial potential;”
Phase II, which involves “further develop[ing] proposals
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ARLTON v. AEROVIRONMENT, INC. 3
which meet particular program needs;” and then Phase III,
which “involves commercial applications of SBIR-funded
research and development or products or services intended
for use by the Federal Government, by follow-on non-SBIR
Federal funding awards.” Night Vision Corp. v. United
States, 469 F.3d 1369, 1371 (Fed. Cir. 2006) (internal quo-
tation marks omitted). Section 638 requires that “[t]o the
greatest extent practicable,” Phase III contracts should be
awarded “to the SBIR and STTR award recipients that de-
veloped the technology.” 15 U.S.C. § 638(r)(4).
Lite Machines received multiple Phase I and Phase II
contracts to develop the technology it ultimately patented
in the ’763 patent. In 2016, however, the Air Force in-
formed the Arltons that Lite Machines would not be
awarded any further follow-on work, including any Phase
III contract. Consequently, the Arltons ceased operations
and closed Lite Machines.
Meanwhile, in 2013, AeroVironment became a subcon-
tractor to the Jet Propulsion Laboratory (“JPL”), a feder-
ally-funded research center managed by the California
Institute of Technology (“Caltech”) under a contract be-
tween Caltech and the National Aeronautics and Space Ad-
ministration (“NASA”). The subcontract required
AeroVironment to build a UAV helicopter for JPL to pro-
vide to NASA for use on the planet Mars. AeroVironment’s
subcontracts make clear that they are “under JPL’s NASA
prime contract.” J.A. 138; see also J.A. 141, 149, 156. To-
gether, AeroVironment and JPL developed a small, auton-
omous helicopter, named the “Ingenuity,” which later
served on missions to explore the Martian surface.
In August 2020, the Arltons sued AeroVironment in the
U.S. District Court for the Central District of California,
alleging that AeroVironment’s making, using, offering for
sale, and sales of Ingenuity within the United States in-
fringe the ’763 patent. Several months later, in November
2020, AeroVironment informed the Arltons it intended to
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ARLTON v. AEROVIRONMENT, INC. 4
move for summary judgment based on immunity from lia-
bility provided to it by 28 U.S.C. § 1498, on the grounds
that any patent infringement AeroVironment engaged in
was for the benefit of, and with the consent of, the federal
government.
AeroVironment filed its summary judgment motion in
February 2021. AeroVironment argued it had developed
Ingenuity for the government pursuant to its subcontracts
with JPL and that the government had expressly author-
ized and consented to any activity that happened to in-
fringe the ’763 patent. Therefore, any suit for patent
infringement had to be brought by the Arltons against the
government, not AeroVironment, in the U.S. Court of Fed-
eral Claims, not district court. The Arltons responded by
contending that AeroVironment’s infringing activities
could not have been for the government, and the govern-
ment could not have validly authorized or consented to Aer-
oVironment’s infringement, because the government was
obligated under § 638 to award Phase III contracts to Lite
Machines, since Lite Machines was an SBIR-recipient and
had developed the underlying technology. In reply, Aero-
Vironment urged the district court to reject the Arltons’
contention because the Court of Federal Claims has exclu-
sive jurisdiction over disputes concerning government con-
tract awards and, in any event, § 638 has nothing to do
with whether § 1498 applies here.
The district court granted AeroVironment’s motion for
summary judgment. It determined there was no genuine
dispute over the material fact that AeroVironment is a gov-
ernment subcontractor and was contracted specifically to
work on Ingenuity; thus, its alleged infringement was per-
formed for the government. The district court further con-
cluded there was “no genuine dispute that the
[g]overnment provided authorization and consent” via the
provision in JPL’s prime contract with NASA, and in each
of AeroVironment’s subcontracts, providing that “[t]he
[g]overnment authorizes and consents to all use and
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ARLTON v. AEROVIRONMENT, INC. 5
manufacture of any invention described in and covered by
a United States patent in the performance of this contract
or any subcontract at any tier.” J.A. 12; see also id. at 5.
Moreover, the district court rejected the Arltons’ argument
that § 638 restricts the extent to which the government can
afford § 1498 immunity to its contractors and subcontrac-
tors, noting that the Arltons did not cite “any legal support
for their position that when a ‘stated [g]overnment policy’
articulated in a government contract conflicts with another
stated [g]overnment policy th[en] the contract cannot be
‘for the [g]overnment.’” J.A. 10-13.
While the summary judgment motion was pending, the
Arltons moved for leave to amend their complaint to add
trade secret claims. The district court denied this motion.
The court concluded that the Arltons had not been diligent
and failed to show good cause to amend after the deadline
provided in the governing scheduling order. In reaching
this conclusion, the district court observed that the Arltons
had admitted that Ingenuity’s specific characteristics re-
lating to the Arltons’ purported trade secrets had been pub-
licly available and they had suspected that Ingenuity
incorporated these trade secrets at the time they filed their
original complaint.
Thereafter, in May 2021, just days before the district
court entered final judgment based on its summary judg-
ment order, AeroVironment appeared in a segment on the
television program 60 Minutes. In the segment, an Aero-
Vironment executive demonstrated the functionality of a
terrestrial version of Ingenuity, which AeroVironment
called the “Terry.” Based on the newly discovered evidence
of the existence of Terry, the Arltons moved to vacate the
summary judgment order and to reopen discovery. In June
2021, the district court granted the Arltons’ motion and the
parties proceeded to take additional discovery.
At the conclusion of the new discovery, in April 2023,
the Arltons filed a new memorandum in opposition to
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ARLTON v. AEROVIRONMENT, INC. 6
AeroVironment’s motion for summary judgment, arguing
that AeroVironment had used Terry to attract market at-
tention, including through the 60 Minutes appearance and
demonstrations at conferences and to potential investors.
AeroVironment replied with a memorandum in support of
its motion for summary judgment, again based on § 1498.
AeroVironment argued that none of its activities consti-
tuted a substantial commercial use, so the entirety of its
conduct was within the scope of AeroVironment’s § 1498
immunity.
In August 2023, the district court again granted sum-
mary judgment to AeroVironment. The court determined
that AeroVironment’s demonstrations of Terry were de
minimis uses and, given the applicability of § 1498, could
not support a judgment of liability against a private party
in district court. It further held that “[t]he other activities
on which [the Arltons] rely would not be actionable even
outside the § 1498 context” and, hence, that conduct plainly
“cannot be infringing where § 1498 applies.” J.A. 29. The
district court entered judgment for AeroVironment in Sep-
tember 2023.
AeroVironment then moved for an award of attorneys’
fees pursuant to 35 U.S.C. § 285. It asserted that the Arl-
tons’ decision to proceed with litigation when any reasona-
ble person would have recognized that AeroVironment was
not a proper defendant made this patent case “exceptional”
within the meaning of the statute. The district court disa-
greed, explaining that though the Arltons were ultimately
unsuccessful, their claims were neither frivolous nor made
in bad faith. Hence, the court denied AeroVironment’s mo-
tion for fees.
Both parties timely appealed. We have jurisdiction
pursuant to 28 U.S.C. § 1295(a)(1).
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ARLTON v. AEROVIRONMENT, INC. 7
II
On procedural issues not unique to the areas of law
that are exclusively assigned to the Federal Circuit, we ap-
ply the law of the pertinent regional circuit. See Vivid
Techs., Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 807
(Fed. Cir. 1999). The Ninth Circuit accords de novo review
to a district court’s grant of summary judgment, which is
appropriate if, after viewing the evidence in the light most
favorable to the non-moving party, there is no genuine dis-
pute of material fact. See Buchanan v. Watkins & Letofsky,
LLP, 30 F.4th 874, 877 (9th Cir. 2022). A district court’s
denial of a motion for leave to amend is reviewed for abuse
of discretion. See AmerisourceBergen Corp. v. Dialysist W.,
Inc., 465 F.3d 946, 949 (9th Cir. 2006). A decision resting
on a clearly erroneous finding of fact may constitute an
abuse of discretion. See Gonzales v. Free Speech Coal., 408
F.3d 613, 618 (9th Cir. 2005).
Whether a patent case is exceptional under 35 U.S.C.
§ 285 is governed by Federal Circuit law. See Blackbird
Tech LLC v. Health In Motion LLC, 944 F.3d 910, 914 (Fed.
Cir. 2019) (“We apply Federal Circuit caselaw to the § 285
analysis, as it is unique to patent law.”) (internal quotation
marks and brackets omitted). We “review all aspects of a
district court’s § 285 determination for abuse of discretion.”
Highmark Inc. v. Allcare Health Mgmt. Sys., Inc., 572 U.S.
559, 561 (2014).
III
We start with the Arltons’ appeal and, in particular,
their challenge to the district court’s grant of summary
judgment of no liability based on AeroVironment’s § 1498
affirmative defense. To prevail on a § 1498 defense, an ac-
cused infringer must show that the patented invention was
used “by or for the United States,” 28 U.S.C. § 1498, which
requires proof that such use was “for the Government” and
“with the authorization or consent of the Government.”
Toxgon Corp. v. BNFL, Inc., 312 F.3d 1379, 1381 (Fed. Cir.
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ARLTON v. AEROVIRONMENT, INC. 8
2002). We agree with the trial court that AeroVironment
is entitled to judgment on its § 1498 defense.
A
The Arltons’ first basis for contending that the district
court erred is that the government could not validly au-
thorize or consent to AeroVironment’s patent infringe-
ment, under § 1498, because doing so conflicts with the
government’s obligation to award any SBIR Phase III con-
tract to Lite Machines, which was the SBIR recipient re-
sponsible for the research and development of the pertinent
technology during Phases I and II. The Arltons rely specif-
ically on 15 U.S.C. § 638, which provides:
[t]o the greatest extent practicable, Federal agen-
cies and Federal prime contractors shall . . . issue,
without further justification, Phase III awards re-
lating to technology . . . to the SBIR and STTR
award recipients that developed the technology.
15 U.S.C. § 638(r)(4). Section 638’s use of the mandatory
term “shall,” according to the Arltons, obligates the govern-
ment to award Phase III contracts to Phase I and II award-
ees unless doing so would be “completely infeasible.”
Appellants’ Open. Br. at 34. Because, in their view, this
standard was not met here, the government was obligated
to award the Phase III contract to Lite Machines, not Aer-
oVironment; thus, the government cannot have validly con-
sented to AeroVironment’s infringement of the ’763 patent,
notwithstanding § 1498. We are not persuaded.
As an initial matter, even if AeroVironment were cor-
rect that § 638 obligated the government to award the
Phase III contract to Lite Machines, remedying this error
would require Lite Machines (not the Arltons) to bring a
protest action (not a patent infringement lawsuit) in the
Court of Federal Claims (not a district court). See Res. Con-
servation Grp., LLC v. United States, 597 F.3d 1238, 1243
(Fed. Cir. 2010) (holding that Court of Federal Claims has
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ARLTON v. AEROVIRONMENT, INC. 9
“exclusive jurisdiction to review the full range of procure-
ment protest cases previously subject to review in [both]
the federal district courts and the Court of Federal
Claims”) (internal quotation marks omitted). In any event,
we conclude that § 638 does not narrow the applicability of
§ 1498.
There is simply no incompatibility, or even conflict, be-
tween § 638 and § 1498. Whereas § 638 guides the govern-
ment’s award of contracts among different private entities,
§ 1498 governs who a patentee must sue for patent in-
fringement (a direct infringer or the United States) and in
which court (district court or the Court of Federal Claims).1
Accordingly, § 638 does not limit the government’s discre-
tion to assume liability under § 1498.
1 The full text of the pertinent part of 28 U.S.C.
§ 1498(a) is as follows:
Whenever an invention described in and covered by
a patent of the United States is used or manufac-
tured by or for the United States without license of
the owner thereof or lawful right to use or manu-
facture 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. . . . [T]he use or manufac-
ture of an invention described in and covered by a
patent of the United States by a contractor, a sub-
contractor, or any person, firm, or corporation for
the Government and with the authorization or con-
sent of the Government, shall be construed as use
or manufacture for the United States.
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ARLTON v. AEROVIRONMENT, INC. 10
B
The Arltons next argue that, even accepting that a
§ 1498 defense could be available to AeroVironment not-
withstanding the government’s alleged obligations under
§ 638, summary judgment was nonetheless improper be-
cause AeroVironment engaged in patent infringement that
was not performed “for the United States.” Specifically,
they contend that even if AeroVironment’s work on Inge-
nuity is immunized under § 1498, its work on Terry is not
also protected. Once again, we do not agree with the Arl-
tons.
Taking the evidence in the light most favorable to the
Arltons, as we must, it cannot be genuinely disputed that
Terry was manufactured by AeroVironment with the au-
thorization and consent of the government. It is undis-
puted that Terry is a terrestrial version of the Ingenuity
helicopter, such that Terry’s capabilities and operations re-
flect those of Ingenuity, allowing the government (and its
prime contractor, JPL) to use Terry to assess functions of
the Ingenuity (which is far away on Mars). J.A. 24.
The record includes a declaration from AeroViron-
ment’s Technical Lead, Matthew Keennon, who explained
that AeroVironment created Terry at the prompting of
JPL, for the government, and JPL contracted with AeroVi-
ronment to use Terry. J.A. 990-91 (declaring that JPL’s
head engineer on Mars Helicopter project “suggested that
there could be a use for a helicopter that functioned as a
stand-alone science vehicle,” adding that “[t]o meet JPL
and NASA’s needs, AeroVironment built a terrestrial copy
of Ingenuity, named ‘Terry’”). The Arltons direct us to por-
tions of Mr. Keennon’s deposition testimony, in which he
said “[t]he primary purpose” for creating Terry “was basi-
cally to have a marketing visual aid that we could use to
promote AeroVironment’s capabilities.” J.A. 1454. The
Arltons further argue that JPL did not identify a use for
Terry until several months after AeroVironment completed
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ARLTON v. AEROVIRONMENT, INC. 11
it. Even if a reasonable jury could find from this record
that AeroVironment did not originally manufacture Terry
for the government, JPL’s subsequent use of Terry to con-
duct acoustic testing and the government’s express consent
(including through this litigation) to Terry’s creation estab-
lish, as a matter of law, that Terry’s manufacture and the
uses apparent from the record are within the scope of the
immunity provided to AeroVironment under § 1498. See
J.A. 1030-35; J.A. 166 (providing, in NASA’s prime con-
tract with JPL, that “[t]he [g]overnment authorizes and
consents to all use and manufacture of any invention de-
scribed in and covered by a United States patent in the per-
formance of the Prime Contract or any Lower-tier
Subcontract at any tier”) (emphasis added); Gov’t Br. at 18
(“[T]he government’s authorization and consent extend to
the manufacture of Terry and its use in the tests for reso-
lution of Ingenuity’s audio anomalies. . . . [T]o the extent
any doubt remains, the United States hereby provides its
authorization and consent through its participation in this
appeal.”).
We reach the same conclusion with respect to what the
Arltons characterize as AeroVironment’s uses of Terry for
marketing purposes.2 The Arltons argue that AeroViron-
ment used Terry for a non-governmental, commercial pur-
pose by demonstrating and displaying Terry at various
public events, including the Association for Unmanned Ve-
hicles Systems International (“AUVSI”), the Wright Broth-
ers National Memorial, Syracuse University, and in the 60
Minutes appearance. AeroVironment also performed
2 The government takes no position on the applica-
tion of § 1498 to educational and marketing activities,
other than to say such activities are not categorically pre-
cluded from protection under the statute. See Gov’t Br. at
18; Oral Arg. at 18:13-19:24, available at
cafc.uscourts.gov/oral-arguments/21-2049_10062025.mp3.
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ARLTON v. AEROVIRONMENT, INC. 12
demonstrations of Terry for potential investors, including
SpaceX, UP.Partners, and Impulse Space.
AeroVironment’s § 1498 defense extends to each of
these uses of Terry. We have previously indicated that,
when a defendant “received no commercial profit” and used
infringing devices “solely for purposes of display” when
demonstrating work performed on behalf of the govern-
ment, it has not engaged in commercial conduct that would
vitiate a § 1498 defense. See TVI Energy Corp. v. Blane,
806 F.2d 1057, 1061 (Fed. Cir. 1986).
Here, viewing the evidence in the light most favorable
to the Arltons, AeroVironment’s demonstrations do not
qualify as commercial uses outside the ambit of § 1498. For
example, AeroVironment’s presentation at the AUVSI was
entitled “Flying on Mars: Development of the Ingenuity
Mars Helicopter,” and its talking points emphasized that
Terry is a terrestrial version of Ingenuity. J.A. 1530, 1535.
While AeroVironment may have received reputational ben-
efits from its demonstrations, including its appearance on
60 Minutes, there is no evidence that AeroVironment de-
rived any commercial profit from the demonstrations. Aer-
oVironment’s uses of Terry with potential investors, which
as far as the record reveals also did not lead to any profit,
cannot reasonably support a contrary finding.
The record is devoid of any evidence that AeroViron-
ment offered Terry for sale to anyone. Nor is there evi-
dence that internal discussions within the company about
potentially commercializing Terry ever materialized into
actual engagements with prospective business partners.
These non-sales cannot constitute evidence of commercial
activity falling outside the scope of § 1498. See generally
BAE Sys. Info. & Elec. Sys. Integration Inc. v. Aeroflex Inc.,
2011 WL 3474344, at *12 (D. Del. Aug. 2, 2011) (“Indeter-
minate speculation and even unrealized ambitions to sell
into an international market are not . . . sufficient to defeat
the § 1498 defense.”).
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ARLTON v. AEROVIRONMENT, INC. 13
At bottom, there is simply not sufficient evidence from
which a reasonable jury could find that AeroVironment en-
gaged in infringing conduct that was not for the benefit of,
and with authorization of and consent from, the govern-
ment. Therefore, we affirm the district court’s grant of
summary judgment to AeroVironment.3
IV
The Arltons additionally fault the district court for
denying their motion for leave to file an amended com-
plaint, which sought to add trade secret claims under fed-
eral and California law. Because the district court did not
abuse its discretion, we affirm this portion of the district
court’s judgment as well.
The Arltons filed their motion for leave to file a first
amended complaint on March 22, 2021, well after the Jan-
uary 8, 2021 deadline for such a request, given the opera-
tion of the Central District’s local rules and the scheduling
order. The district court found that the Arltons had failed
to diligently pursue their proposed amendment. The court
further determined that the Arltons lacked good cause for
their untimely request because (1) the specific facts regard-
ing Ingenuity that purportedly relate to the Arltons’ trade
secrets were publicly available and (2) the Arltons admit-
ted they had already suspected Ingenuity incorporated
their trade secrets as far back as when they filed their orig-
inal complaint.
The Arltons assert that the district court abused its dis-
cretion by ignoring their evidence of good cause, namely
that they did not receive relevant discovery from
3 We need not, and do not, reach the issue of whether
the same de minimis use doctrine we have recognized in
connection with infringement under 35 U.S.C. § 271, see
Embrex, Inc. v. Serv. Eng’g Corp., 216 F.3d 1343, 1349
(Fed. Cir. 2000), applies equally to § 1498 immunity.
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ARLTON v. AEROVIRONMENT, INC. 14
AeroVironment until December 30, 2020. Thus, they con-
tinue, even expending reasonable efforts it was just not
possible to develop their trade secret claim before the Jan-
uary 8, 2021 deadline to meet and confer before filing a mo-
tion for leave to amend the pleadings. In the Arltons’
telling, the district court applied an overly exacting stand-
ard, requiring them to exercise “extreme diligence” rather
than, as should have been required, reasonable diligence.
The district court did not abuse its discretion. For one
thing, the Arltons, after obtaining new evidence supporting
a potential trade secret claim on December 30, 2020, did
not (until after the deadline for amendment had passed)
inform the district court of what they had recently learned
or of their need for additional time to prepare their amend-
ment. The Arltons admitted they suspected Ingenuity in-
corporated their trade secrets at the time they brought this
case. Yet, for whatever reason, they did not pursue the
trade secret claim until very close to the scheduling order’s
deadline for amendment of pleadings. As importantly,
there is no clear error in the district court’s finding that
much of the information about Ingenuity on which the Arl-
tons predicate their trade secret claim was publicly availa-
ble, and therefore accessible to the Arltons if they had acted
with diligence, long before January 2021.
Hence, we affirm the district court’s denial of the Arl-
tons’ motion to file a first amended complaint.
V
Lastly, we turn to AeroVironment’s cross-appeal,
which seeks to overturn the district court’s denial of its mo-
tion for attorneys’ fees under 35 U.S.C. § 285. Here again
we find no abuse of discretion and, thus, affirm.
Section 285 authorizes a district court to award attor-
neys’ fees to the prevailing party in an exceptional patent
case. See Octane Fitness, LLC v. Icon Health & Fitness,
Inc., 572 U.S. 545, 554 (2014). An exceptional case is
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ARLTON v. AEROVIRONMENT, INC. 15
simply one that “stands out from others,” either in terms of
“the substantive strength of a party’s litigating position” or
“the unreasonable manner in which the case was litigated.”
Id. at 554-55. A case may be exceptional even if it is not
objectively baseless or frivolous. See id.
AeroVironment predicated its attorneys’ fees motion
principally on its contention that “the readily-apparent and
indisputable applicability of § 1498 made the Arltons’
claims frivolous from the start.” Cross-Appellant’s Br. at
55. While AeroVironment also argues that the manner in
which the Arltons litigated renders the case exceptional,
their insistence that the Arltons litigated unreasonably
rests entirely on the premise that their claims were frivo-
lous. See, e.g., id. at 60 (“Appellants’ lack of diligence into
the viability of their claims is inexcusable.”).
The district court’s rejection of AeroVironment’s char-
acterization of the Arltons’ case and their litigation conduct
was not an abuse of discretion. The district court found
this case was not “cut and dried” and that the Arltons did
not “ma[k]e frivolous arguments in opposing summary
judgment.” J.A. 37; see also J.A. 38. To the contrary, the
district court remarked that it had needed to undertake “a
careful analysis of [a] nuanced area of law” before ruling on
the Arltons’ § 638 theory. J.A. 37-38. Just because the dis-
trict court rejected the Arltons’ claim does not mean this
was an easy call or that this is an exceptional case. See
Munchkin, Inc. v. Luv n’ Care, Ltd., 960 F.3d 1373, 1378
(Fed. Cir. 2020) (holding that § 285 is not intended “to pun-
ish a party for losing”) (internal quotation marks omitted).
Accordingly, we affirm the district court’s denial of Aer-
oVironment’s motion for attorneys’ fees.
Case: 21-2049 Document: 102 Page: 15 Filed: 02/04/2026

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ARLTON v. AEROVIRONMENT, INC. 16
VI
We have considered the parties’ remaining arguments
but do not find them persuasive. For the foregoing reasons,
we affirm.
AFFIRMED
COSTS
Each party to bear its own costs.
Case: 21-2049 Document: 102 Page: 16 Filed: 02/04/2026

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