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Wordtech Systems, Inc. v. Integrated Network Solutions

April 10, 2009

WORDTECH SYSTEMS, INC., A CALIFORNIA CORPORATION PLAINTIFF,
v.
INTEGRATED NETWORK SOLUTIONS, INC., DBA INTEGRATED NETWORK SOLUTIONS, CORP. AKA INTEGRATED NETWORK SOLUTIONS AKA INTEGRATED SYSTEMS AKA INTEGRATED NETWORK STORAGE COMPANY AKA INSC; ET AL., DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Wordtech Systems, Inc. ("Plaintiff"), filed the instant action on September 22, 2004, alleging that Defendants infringed on various of its patents. On November 17, 2008, a jury unanimously found for Plaintiff, determined the infringement was willful, and awarded Plaintiff $250,000.

The Court then directed the parties to submit simultaneous briefing on the issues of enhanced damages and attorneys' fees.

Pursuant to the Court's Order, the parties filed their papers on December 4, 2008. This Court subsequently awarded Plaintiff treble damages, pre-judgment interest on the compensatory award, attorneys' fees, post-judgment interest, and costs. The Court also ordered further briefing on the calculations of each of these figures, and now finds as follows.*fn1

ANALYSIS

I. ATTORNEYS' FEES AWARDED PURSUANT TO 35 U.S.C. § 285 AND THIS COURT'S JANUARY 15, 2009, MEMORANDUM AND ORDER

Pursuant to 35 U.S.C. § 285, "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." In its prior Order, the Court held such fees are appropriate here. Thus, the only issue remaining is the requisite valuation.

Plaintiff seeks a total of $745,759.71, comprised of:

1) $150,197.71 allocated to Janine Ogando, In-House Counsel;

2) $65,837.00 allocated to Richard Peterson, Patent Attorney;

3) $107,800.00 allocated to Heidi Timken, Partner, Timken, Johnson & Hwang ("TJH");

4) $11,352.50 allocated to Leslie Johnson, Partner, TJH;

5) $181,252.50 allocated to Ki Hwang, Associate, TJH;

6) $29,640 allocated to Elizabeth Hwang, Associate, TJH; and

7) $199,680.00 allocated to Christian Martinez, In-House Counsel. Defendants challenge Plaintiff's fee request on several grounds, each of which is addressed below.

A. The Applicable Law

"The amount of the award is assessed at the discretion of the district court." Lam, Inc. v. Johns-Manville Corp., 718 F.2d 1056, 1068 (Fed. Cir. 1983) (internal citations omitted). "The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). "A reasonable hourly rate is the prevailing market rate, defined as the rate prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Sabella v. Secretary of the Dept. Of Health and Human Servs., --- Fed. Cl. ----, 2009 WL 539880, at *3 (Fed. Cl.) (internal citations and quotations omitted). "Many courts applying this standard conclude that a particular attorney's billing rate is relevant, but not dispositive," evidence of reasonableness. ICU Medical, Inc. v. Alaris Medical Systems, Inc., 2007 WL 6137002, at *3 (C.D. Cal.).

"In fixing an award of attorneys' fees in those actions in which such an award is appropriate, the Court will consider the following criteria: (1) the time and labor required of the attorney(s); (2) the novelty and difficulty of the questions presented; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney(s) because of the acceptance of the action; (5) the customary fee charged in matters of the type involved; (6) whether the fee contracted between the attorney and the client is fixed or contingent; (7) any time limitations imposed by the client or the circumstances; (8) the amount of money, or the value of the rights involved, and the results obtained; (9) the experience, reputation and ability of the attorney(s); (10) the 'undesirability' of the action; (11) the nature and length of the professional relationship between the attorney and the client; (12) awards in similar actions; and (13) such other matters as the Court may deem appropriate under the circumstances." E.D. Cal. Local Rule 54-293.

Additionally, "[t]he district court should exclude from this initial fee calculation hours that were not 'reasonably expended.' Cases may be overstaffed, and the skill and experience of lawyers vary widely. Counsel for the prevailing party should make a good faith effort to exclude from a fee request the hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his fee submission. 'In the private sector, 'billing judgment' is an important component in fee setting. It is no less important here. Hours that are not properly billed to one's client also are not properly billed to one's adversary pursuant to statutory authority.'" Hensley, 461 at 434 (emphasis in original), quoting Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980).

Finally, "it is clearly established in the Ninth Circuit that it is the applicant's burden to produce specific evidence, other than the declarations of interested counsel, that the requested rates are in line with those prevailing in the community for lawyers with comparable skill and reputation." Navarro v. General Nutrition Corp., 2005 WL 2333803, *8 (N.D. Cal. 2005); see also Lam, 718 F.2d at 1068 ("In determining the reasonableness of the award, there must be some evidence to support the reasonableness of, inter alia, the billing rate charged and the number of hours expended."); PPG Industries, Inc. v. Celanese Polymer Specialties Co., Inc., 840 F.2d 1565, 1570 (Fed. Cir. 1988) ("Attorney fees are allowable if they are based on records that are substantially reconstructed and reasonably accurate."). Nevertheless, "where documentation is inadequate, the district court is not relieved of its obligation to award a reasonable fee...[A] district court itself has experience in determining what are reasonable hours and reasonable fees, and should rely on that experience and knowledge if the documentation is considered inadequate." Slimfold Mfg. Co., Inc. v. Kinkead Industries, Inc., 932 F.2d 1453, 1459 (Fed. Cir. 1991) (internal quotations and citations omitted).

In the context of the above case law, the Court will now address Defendants' challenges to: 1) the rates sought by Plaintiff for various of its counsel; 2) the reasonableness of hours billed in pursuit of absent or voluntarily dismissed Defendants or on allegedly unsuccessful or duplicative motions; and 3) ...


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