UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA
November 16, 2009
B-K LIGHTING, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
VISION3 LIGHTING, A BUSINESS ENTITY OF UNKNOWN FORM, AND FRESNO VALVES & CASTINGS, INC., A CALIFORNIA CORPORATION, DEFENDANTS.
The opinion of the court was delivered by: Margaret M. Morrow, United States District Judge
ORDER AWARDING FVC ATTORNEYS' FEES
This case involved a patent dispute between plaintiff B-K Lighting, Inc. and defendant Fresno Valves & Casting, Inc. Having previously declared the case exceptional and concluded that it was appropriate to award attorneys' fees to FVC, which prevailed on B-K's affirmative claims, the court now evaluates the reasonableness of the fees requested.
I. FACTUAL AND PROCEDURAL BACKGROUND
The court has issued multiple orders detailing the factual and procedural background of this litigation. By way of summary, on May 23, 2008, the court granted FVC's motion for summary judgment, finding, based on undisputed evidence, that the patent-in-suit was invalid as obvious.*fn1 Given this conclusion, the court declined to consider the other invalidity and enforceability arguments FVC raised, as well as the parties' arguments concerning infringement.*fn2
Also on May 23, the court addressed B-K's motion for summary judgment on FVC's counterclaim alleging violation of California Business and Professions Code § 17200.*fn3 The counterclaim had three bases: first, FVC argued that a press release issued by B-K was timed to damage FVC's business relationships; second, it asserted that B-K had filed the litigation in bad faith and that its claims were meritless; and third, FVC alleged that B-K had stolen a FVC prototype from a lighting industry exhibition.*fn4 The court found that FVC had raised triable issues of fact regarding the § 17200 claim only to the extent it was based on the alleged theft. Summary judgment on that aspect of the claim was denied; it was entered, however, on so much of the claim as concerned the issuance of the press release and the filing of this litigation.*fn5 The court subsequently directed the parties to file a stipulation permitting entry of an order of dismissal on the theft of the prototype § 17200 counterclaim,*fn6 which the parties did on July 7, 2008.*fn7
Also on July 7, FVC filed a motion seeking a declaration that the case was exceptional and an award of attorneys' fees and expenses under 35 U.S.C. § 285 as well as sanctions under 28 U.S.C. § 1927. FVC asserted that B-K had engaged in inequitable conduct before the patent office, as well as misconduct during the course of the litigation, and that the action was frivolous and pursued in bad faith.*fn8 After a hearing on the attorneys' fees motion on August 25, 2008, the court took the matter under submission to consider the arguments of counsel.*fn9 On November 14, 2008, the court issued an order awarding FVC attorneys' fees under 35 U.S.C. § 285.*fn10
Meanwhile, FVC filed an application to tax costs.*fn11 B-K opposed the application on the ground that FVC had not prevailed and was therefore not entitled to a costs award.*fn12 As a consequence, the court clerk notified the parties that a court order identifying the prevailing party was needed before action on the application for costs could be taken. FVC moved for a determination that it was the prevailing party.*fn13 On November 25, 2008, the court granted FVC's motion in part, finding that it was the prevailing party with respect to B-K's affirmative claims.*fn14
In view of the fact that B-K prevailed on two-thirds of FVC's tripartite § 17200 counterclaim, however, the court held that B-K had also prevailed, albeit to a limited extent.*fn15 Accordingly, the court exercised its discretion to apportion costs between the parties, concluding that FVC should recover 80 percent of the costs deemed recoverable by the clerk of the court.*fn16
Because FVC had submitted no documentation supporting its fees motion, the court directed it to provide a detailed accounting of the hours expended and rates charged, as well as further legal and/or evidentiary support for the amount sought.*fn17 FVC filed a supplemental pleading on December 1, 2008.*fn18 B-K filed a responsive pleading on December 15.*fn19 On June 17, 2009, the court issued an order directing FVC to file additional evidence in support of its requested hourly rates.*fn20 FVC filed additional evidence pursuant to the court's order on June 23, 2009.*fn21
A. Legal Standard Governing Attorneys' Fees in Patent Cases
"The court in exceptional [patent] cases may award reasonable attorneys fees to the prevailing party." 35 U.S.C. § 285. The statute is designed "to compensate the prevailing party for its monetary outlays in the prosecution or defense of the suit," Central Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1578 (Fed. Cir. 1983), and to serve " as a deterrent to 'improper bringing of clearly unwarranted suits' for patent infringement," Automated Business Companies, Inc. v. NEC America, Inc., 202 F.3d 1353, 1355 (Fed. Cir. 2000) (quoting Mathis v. Spears, 857 F.2d 749, 754 (Fed. Cir. 1988)).*fn22
"A case may be deemed exceptional when there has been some material inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed.R.Civ.P. 11, or like infractions." Brooks Furniture Mfg., Inc. v. Dutailier Int'l, Inc., 393 F.3d 1378, 1381 (Fed. Cir. 2005) (citing Cambridge Prods. Ltd. v. Penn Nutrients, Inc., 962 F.2d 1048, 1050-51 (Fed. Cir. 1992)); see Braessler, U.S.A. I, L.P. v. Stryker Sales Corp., 267 F.3d 1370, 1380 (Fed. Cir. 2001) ("The prevailing party may prove the existence of an exceptional case by showing: inequitable conduct before the PTO; litigation misconduct; vexatious, unjustified, and otherwise bad faith litigation; a frivolous suit or willful infringement").
"[U]se of the term 'exceptional' in § 285 is not to be taken lightly." Visto Corp. v. Sproqit Technologies, Inc., No. C-04-0651 EMC, 2007 WL 160942, *2 (N.D. Cal. Jan. 17, 2007). "Congress in choosing to limit district court authority to award attorney's fees to 'exceptional' cases has made clear that this should occur only in rare or extraordinary cases.... [Thus,] courts elucidating this statutory language have generally found that 'exceptional' cases are those rare or extraordinary cases blighted and marked by a party's bad faith or inequitable conduct." KnorrBremse Systeme Fuer Nutzfarzeuge GmbH v. Dana Corp., 372 F.Supp.2d 833, 848 (E.D. Va. 2005). Consequently, a court that intends to award fees under § 285 must make a finding that a party took "egregious action... such that fees must be awarded... to prevent a gross injustice." Visto, 2007 WL 160924 at *2.
To decide "whether a case is exceptional and, thus,... warrant[s] an award of attorney fees under § 285 is a two-step process in which the district court must (1) determine whether there is clear and convincing evidence that a case is exceptional... and (2) if so,... determine in its discretion whether an award of attorney fees is justified." Digeo, Inc. v. Audible, Inc., 505 F.3d 1362, 1366-67 (Fed. Cir. 2007). On appeal, the court's finding on the first question is reviewed for clear error while its finding on the second is reviewed for abuse of discretion. Id. Although a court may not award attorneys' fees absent a finding that a case is exceptional, it may decline to award fees in an exceptional case in its discretion. See Enzo Biochem, Inc. v. Calgene, Inc., 188 F.3d 1362, 1370 (Fed. Cir. 1999) ("[I]f the case is found to be exceptional, the district court must then determine whether attorney fees should be awarded").
As noted, the court previously concluded that this case was "exceptional" within the meaning of § 285 and that awarding FVC fees was justified.*fn23 The final step is a calculation of the amount of attorneys' fees FVC is entitled to recover. See, e.g., Nikko Materials USA, Inc. v. R.E. Service Co., Inc., No. C 03-2549 SBA, 2006 WL 118438, *6 (N.D. Cal. Jan. 13, 2006) (procedure for awarding fees consists of determining "(1) whether there is clear and convincing evidence that the case is exceptional; (2) if so, whether an award of attorney fees is warranted; and (3) whether the attorney fees sought are reasonable in amount" (citing Interspiro USA, Inc. V. Figgie Int'l Inc., 18 F.3d 927, 933 (Fed. Cir. 1994); Machinery Corp. of America v. Gullfiber AB, 774 F.2d 467, 470 (Fed. Cir. 1985)).
B. Calculation of the Amount of Attorneys' Fees
Once a party has established that it is entitled to an award of attorneys' fees, "[i]t remains for the district court to determine what fee is 'reasonable.'" Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) (quoting Nadeau v. Helgemoe, 581 F. 2d 275, 278-79 (1st Cir. 1978)). "The Federal Circuit has emphasized that a reasonable attorney fee is 'a determination that lies primarily within the discretion of the district court,' which may 'consider all the relevant circumstances in a particular case.'" Takeda Chemical Industries, Ltd. v. Mylan Laboratories, Inc., Nos. 03 CIV. 8253(DLC), 04 CIV.1966(DLC), 2007 WL 840368, *3 (S.D.N.Y. Mar. 21, 2007) (quoting Junker v. Eddings, 396 F.3d 1359, 1365-66 (Fed. Cir. 2005)).
"The lodestar method is the proper method to use under 35 U.S.C. § 285 and is presumed to be the reasonable fee." Comark Communications, Inc. v. Harris Corp., No. CIV. A. 95-2123, 1998 WL 150946 (E.D. Pa. Mar. 30, 1998) (citation omitted), aff'd, 156 F.3d 1182 (Fed. Cir. 1998). "Under this approach, the Court first determines a lodestar figure by multiplying the number of hours reasonably spent on the litigation by a reasonable hourly rate." ICU Medical, Inc. v. Alaris Medical Systems, Inc., No. SA CV 04-00689 MRP (VBKx), 2007 WL 6137002, *1 (C.D. Cal. June 28, 2007), aff'd, 558 F.3d 1368, 1380 (Fed. Cir. 2009) ("We affirm the district court's award of attorney fees. The district court applied the appropriate legal standard and articulated several bases in support of the award, none of which ICU has shown to be clearly erroneous"); Lam, Inc. v. Johns-Manville Corp., 718 F.2d 1056, 1068 (Fed. Cir. 1983) ("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" (citations omitted)).*fn24
The court determines a reasonable hourly rate by looking to the prevailing market rate in the community for comparable services. See ICU Medical, Inc., 2007 WL 6137002 at *1 ("The reasonable hourly rate is also usually determined by reference to the rates charged by lawyers in the same legal community with comparable skills and reputations," citing Blum v. Stenson, 465 U.S. 886, 895 (1984)); see also, e.g., Bell v. Clackamas County, 341 F.3d 858, 868 (9th Cir. 2003); View Engineering, Inc. v. Robotic Vision Systems, Inc., 208 F.3d 981, 987 (Fed. Cir. 2000). The party requesting fees bears the burden of producing satisfactory evidence that the requested rates are in line with prevailing rates for lawyers of reasonably comparable skill and reputation in the community. View Engineering, 208 F.3d at 987 (citing Jordan v. Multnomah County, 815 F.2d 1258, 1263 (9th Cir. 1987)).
"This presumptively valid lodestar figure may then be increased or decreased in 'rare' and 'exceptional' cases based on an evaluation of the Kerr factors not already subsumed in the initial lodestar calculations, if those adjustments are supported by 'specific evidence' and 'detailed findings' by the trial court." ICU Medical, Inc., 2007 WL 6137002 at *1 (citing Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986), and Van Gerwen v. Guarantee Mutual Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000)). After computing the lodestar, therefore, the court must assess whether additional considerations require adjustment of the figure, such as the novelty and complexity of the issues, the specific skill and experience of counsel, the quality of representation and the results obtained.*fn25 See Kerr, 526 F.2d at 70; see also Blum, 465 U.S. at 989-900; Clark v. City of Los Angeles, 803 F.2d 987, 990-91 & n. 3 (9th Cir. 1986); Cunningham v. County of Los Angeles, 879 F.2d 481, 484 (9th Cir. 1988).
"A strong presumption exists that the lodestar... represents a reasonable fee." G & G Fire Sprinklers, Inc. v. Bradshaw, 136 F.3d 587, 600 (9th Cir. 1998), vacated on other grounds, 526 U.S. 1061 (1999). "[T]hus a multiplier may be used to adjust the lodestar amount upward or downward only in rare and exceptional cases, supported by both specific evidence [in] the record and detailed findings by the lower courts that the lodestar amount is unreasonably low or unreasonably high." See Van Gerwen, 214 F.3d at 1045 (internal quotations omitted).
In determining a reasonable attorneys' fee award, courts look to evidence such as "hourly time records, full expense statements, documentation of attorney hourly billing rates in the community for the particular type of work involved, the attorney's particular skills and experience, and detailed billing records or client's actual bills showing tasks performed in connection with the litigation." Junker, 396 F.3d at 1366.
1. Counsel's Hourly Rates
To calculate the lodestar figure, the party seeking fees must submit "satisfactory evidence... that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Blum, 465 U.S. at 895-96 n. 11. The relevant community is that in which the district court sits. See Schwartz v. Secretary of Health and Human Servs., 73 F.3d 895, 906 (9th Cir. 1995). Declarations regarding the prevailing market rate in the relevant community suffice to establish a reasonable hourly rate. See Widrig v. Apfel, 140 F.3d 1207, 1209 (9th Cir. 1998); Guam Soc'y of Obstetricians & Gynecologists v. Ada, 100 F.3d 691, 696 (9th Cir. 1996) (noting that declarations from attorneys in the community can provide adequate proof of the reasonableness of counsel's rates); see also Earthquake Sound Corp. v. Bumper Industries, 352 F.3d 1210, 1215 (9th Cir. 2003) (discussing the affidavit of "an attorney practicing in the same region as Earthquake's attorneys," who opined that "Earthquake's attorney rates were reasonable and customary").
Courts also frequently use survey data in evaluating the reasonableness of attorneys' fees. Mathis, 857 F.2d at 755-56 ("Again pointing to no evidence in the record, Mathis labels 'inconclusive' American Patent Law Association [ ] surveys for 1981 and 1983, and an American Intellectual Property Law Association [ ] 1985 survey of Los Angeles-area patent-lawyer billing rates to which the district court referred in assessing the reasonableness of the rates charged Hydro.... As the law makes clear, the district court properly considered the surveys. See Hensley, 461 U.S. at 430 n. 3... (customary fee a factor to guide determination of 'reasonable attorney's fee')..." (citation omitted)); see also, e.g., Takeda Chemical Industries, Ltd., 2007 WL 840368 at *3 ("In determining a reasonable rate, a court may refer to American Intellectual Property Law Association ('AIPLA') surveys," quoting Mathis, 857 F.2d at 755); Trend Products Co. v. Metro Industries Inc., 1989 WL 418777, 10 U.S.P.Q.2d 1539, 1540 (C.D. Cal. 1989) ("The American Intellectual Property Law Association has conducted a survey to ascertain billing rates of patent lawyers in various geographical areas, including the Los Angeles area. The reports attached to Mr. Barclay's declaration indicate that all rates submitted to the Court are under the median rate for this geographical area.... Based upon the survey and other cases this Court has seen, this requested rate for attorney fees for the years in question are very reasonable").
In support of its motion for fees, FVC originally submitted the declaration of Duane Mathiowetz, counsel of record and a partner in the law firm of Howrey LLP. In its response, B-K did not challenge the reasonableness of FVC's requested rates. In response to the court's order requesting further information on the hourly rates requested, Mathiowetz submitted a supplemental declaration providing additional information regarding the reasonableness of the rates detailed in FVC's initial filing.
According to Mathiowetz, each member of FVC's counsel at Howrey focuses on patent litigation on a daily basis.*fn26 The hourly rates for Howrey associates ranged from $225 to $355, and the hourly rates for Howrey partners ranged from $465 to $655.*fn27 Mathiowetz, who led the litigation team and was responsible for the day-to-day management of this case,*fn28 is a partner in Howrey's Intellectual Property Group in San Francisco, and has over 25 years of experience litigating complex intellectual property matters.*fn29 His billing rate ranged from $540 to $655 per hour over the course of the litigation.*fn30 K.T. Cherian, another partner in Howrey's Intellectual Property Group who focuses on intellectual property litigation and has over 20 years of relevant litigation experience, provided guidance relating to litigation strategy and was involved with client management and conferring with opposing counsel in the early stages of the case.*fn31 His billing rate ranged from $540 to $570per hour over the course of his involvement in this case.*fn32 Scott Wales, a partner in Howrey's Intellectual Property group whose practice focuses on intellectual property litigation (including patent litigation in electrical, mechanical and chemical technologies), assisted with the briefing of FVC's motion to dismiss and provided strategic guidance in the early stages of the case.*fn33 His billing rate ranged from $465 to $495 per hour over the course of his involvement in this case.*fn34 Lorrel Birnschein, who worked in the Intellectual Property Group as a mid-level associate before leaving Howrey in late 2006, conducted legal research and prepared motions on behalf of FVC at a billing rate of $355 per hour.*fn35 Irene Yang, a third-year associate whose practice focuses on patent litigation covering a variety of technologies, including mechanical and electrical technologies and medical devices, conducted legal research, prepared briefings and filings, prepared for depositions, worked with experts, prepared briefings for mediation, argued motions, and assisted with pretrial filings.*fn36 Her billing rate ranged from $315 to $350 per hour during her involvement with this case.*fn37 Seth Herring, a second-year associate whose focus is intellectual property litigation, conducted legal research at a rate of $225 per hour during his involvement in this case.*fn38 Finally, Todd Chesnut, a senior paralegal in Howrey's San Francisco office, assisted in the preparation and filing of motions and briefs with the court, pretrial matters and discovery matters. His billing rate ranged from $245 to $265 per hour over the course of the case.*fn39
FVC's outside patent counsel, Haynes Beffel & Wolfeld, also contributed to this litigation. HBW is an intellectual property counseling and patent prosecution firm with in-depth technical experience in a variety of technologies, including electrical, software-related, optics, medical devices, and biology.*fn40 James Hann, a partner with HBW who was retained by FVC to initially file a protest in the reissue prosecution of B-K's '084 patent, and who later provided strategic guidance to Howrey and FVC, billed between $350 and $380 per hour over the course of his involvement in this case.*fn41
In support of these rates, FVC submits excerpts from relevant Price Waterhouse Coopers salary surveys. According to one, law firms practicing intellectual property litigation nationally charged a median billing rate of $658 per hour for equity partners. Howrey's average hourly rate of $646 for equity partners ranked 12 out of the 22 firms included in this nationwide intellectual property litigation survey group.*fn42 Likewise, such firms charged a median billing rate of $416 per hour for associates; Howrey's average hourly rate for associates, $419, ranked 11 out of the 22 firms included in this nationwide intellectual property litigation survey group.*fn43 FVC also submits a more particularized survey focused on Palo Alto / Silicon Valley firms.*fn44 This survey excerpt indicates that law firms of comparable size to Howrey in Northern California billed a median rate of $665 for equity partners (Howrey's average billing rate of $601 ranked 23 out of 28) and billed a median rate of $431 per associates (Howrey's average billing rate of $436 ranked 13 out of 28).*fn45 FVC also cites to 2007 and 2008 National Law Journal Billing Surveys, which indicate that comparable Los Angeles law firms charged similar rates as those charged in this litigation.*fn46
Finally, FVC references the AIPLA 2007 Report of the Economic Survey.*fn47 For intellectual property lawyers practicing in Los Angeles, the median hourly rate for partners in 2006 was $485; the median hourly rate for associates during the same time was $298.*fn48 The AIPLA survey also indicates that the median hourly rate for attorneys in firms with more than 150 intellectual property lawyers (like Howrey) was $500 for partners and $320 for associates; the median hourly rate for attorneys in firms with between 6 to 10 intellectual property lawyers (likes Haynes Beffel & Wolfeld) was $315 for partners and $225 for associates.*fn49
In view of counsels' experience and the submitted survey data, as well as its own knowledge of prevailing rates in the Los Angeles area for intellectual property attorneys, the court concludes that FVC's rates are reasonable. See, e.g., Love v. Mail on Sunday, 2007 WL 2709975, *8 (C.D. Cal. Sept. 7, 2007) ("Defendants were represented in this action by the firm Manatt, Phelps & Phillips, LLP.... The personnel working on this matter were billed at the following rates: Barry Mallen, partner, $540 and $570 per hour; Joy Teitel, senior associate, $410 and $460 per hour; Lee Phillips, partner, $660 and $690 per hour; Eric Custer, senior counsel, $460 and $485 per hour; Mark Lee, partner, $560 and $590 per hour; Charles Gomez, junior associate, $305 per hour; and Bridget McLaughlin and Lindy Williams, senior paralegals, $220 and $230 per hour, and $245 per hour, respectively. These rates are consistent with the rates typically charged by other highly-regarded southern California law firms for similar work by attorneys of comparable experience" (citations omitted)).
2. Reasonableness of the Hours Charged
A court may award attorneys' fees only for the number of hours it concludes were reasonably expended litigating the case. "Counsel for the prevailing party should make a good faith effort to exclude from a fee request 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." Hensley, 461 U.S. at 434. At the outset, "[t]he fee applicant bears the burden of documenting the appropriate hours expended in litigation and must submit evidence in support of those hours worked." Gates v. Deukmejian, 987 F.2d 1392, 1397 (9th Cir. 1992). "'The party opposing the fee application has a burden of rebuttal that requires submission of evidence to the district court challenging the accuracy and reasonableness of the hours charged or the facts asserted by the prevailing party in submitted affidavits.'" Common Cause v. Jones, 235 F.Supp.2d 1076, 1079 (C.D. Cal. 2002) (quoting Deukmejian, 987 F.2d at 1397 (citing Blum, 465 U.S. at 892 n. 5 and Toussaint v. McCarthy, 826 F.2d 901, 904 (9th Cir. 1987)).
In its supplemental response, B-K challenges the reasonableness of FVC's hours on a variety of bases. The court addresses each argument in turn.
a. Fees and Costs Associated with FVC's § 17200 Counterclaim
FVC asserts that, in view of the fact that its counsel obtained "excellent results," it is entitled to recover all of its attorneys' fees and expenses, including fees and costs related to its § 17200 claim.*fn50 B-K counters that fees cannot be awarded under § 285 for work on non-patent issues.*fn51 This misstates the law. Although § 285 does not authorize an award of fees for work performed on most non-patent claims, it does provide a basis for an award of fees on a non-patent claim if the issues raised by the claim are intertwined with the patent issues. See, e.g., Beckman Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547, 1552 n. 2 (Fed. Cir. 1989) ("LKB also contends that it was improper for the district court to consider a non-patent claim, namely the antitrust counterclaim, in a recovery under 35 U.S.C. § 285. However, in an action having both patent and non-patent claims, recovery may be had under § 285 for the non-patent claims if the issues involved therewith are intertwined with the patent issues. See Stickle v. Heublein, 716 F.2d [1550,] 1564 [(Fed. Cir. 1983)]. Since LKB's antitrust claim was based on alleged inequitable conduct in the PTO, this is certainly the case in the present litigation"); see also Building Innovation Industries, LLC v. Onken, 473 F.Supp.2d 978, 984 (D. Ariz. 2007) ("Section 285 permits fees 'for time incurred in the litigation of legitimate patent claims' and non-patent 'issues... so intertwined with... patent issues as to make section 285 applicable to the case in its entirety'" (quoting Interspiro USA, Inc., 18 F.3d at 933)).
Assuming, without deciding, that FVC's § 17200 counterclaim was sufficiently intertwined with B-K's patent claims to be eligible for inclusion in a fees' award under § 285, the court nonetheless concludes that FVC cannot recover fees or costs on the claim. As discussed in its prevailing party order, FVC was not successful on its § 17200 counterclaim: B-K prevailed on two of the three aspects of the claim, and the third was dismissed. It is therefore appropriate to reduce the lodestar to reflect that fees on this claim are not being awarded. See, e.g., Hensley, 461 U.S. at 436 ("If, on the other hand, a [prevailing party] has achieved only partial or limited success, the product of hours reasonably expended on the litigation as a whole times a reasonable hourly rate may be an excessive amount. This will be true even where the [prevailing party]'s claims were interrelated, non-frivolous, and raised in good faith"); Deukmejian, 987 F.2d at 1404 ("In Hensley the Supreme Court noted that the 'results obtained' was one factor that might lead the district court to adjust the presumptively reasonable lodestar calculation and that this factor 'is particularly crucial where a [party] is deemed "prevailing" even though he succeeded only on some of his claims for relief'" (citing Hensley, 461 U.S. at 434)).
Indeed, FVC acknowledges that the court "may draw a distinction between fees related to the core patent infringement, invalidity and unenforceability claims and those related to the adjunct § 17200 claims."*fn52 It states that it has reviewed its billing records and segregated the time and fees related to the § 17200 claim to facilitate an appropriate lodestar reduction.*fn53 Based on this accounting, FVC asserts that its requested fees and costs total -- $1,189,526.73 -- should be reduced by approximately five percent (to $1,125,939.62).*fn54
B-K contends that this reduction "is not commensurate with the amount of time and attention devoted to [the § 17200] claim."*fn55 It argues that FVC has reduced the time logged by only two Howrey lawyers; entries reflecting work by paralegals and other attorneys have not been reduced.*fn56 B-K proffers three spreadsheets, created from FVC's submissions, that allegedly reflect (1) general, vague and redacted narrative entries;*fn57 (2) entries associated with motions for summary judgment;*fn58 and (3) entries associated with discovery that it asserts should be reduced.*fn59 On the basis of its review of FVC's submissions, B-K concludes that "it [is] impossible [ ] to ascertain all of the work that was actually devoted to the 17200 claim." It therefore asks the court to apply the twenty percent reduction previously adopted for costs to the fee award sought here.*fn60
Having carefully reviewed the documents submitted, the court agrees that FVC has not deducted sufficient time from the total to reflect the energy and resources actually expended on its unsuccessful § 17200 counterclaim. First, its proposed reduction of five percent does not comport with the court's earlier analysis and conclusion that the counterclaim absorbed approximately twenty percent of the parties' efforts over the course of this litigation. Second, the time records FVC has submitted include vague entries regarding discovery and summary judgment motion practice; given that these phases of the litigation involved both the patent and § 17200 claims, the court agrees with B-K that at least some of the time reflected in these generalized entries must have been devoted to the § 17200 counterclaim. The records also include disbursements for costs that must have been related to the § 17200 counterclaim. Accordingly, the court concludes that the overall hours and costs billed must be reduced further to achieve an accurate lodestar figure. Consistent with its earlier order, the court reduces the total sum for fees and costs by twenty percent, or from $1,189,526.73 to $951,621.38. With this as a base, the court next considers B-K's claims regarding excessive or unnecessary fees.*fn61
b. Excessive or Unnecessary Fees
B-K charges that fees associated with a variety of motions and litigation activities are excessive and/or unnecessary. Since these sums were not "reasonably expended," it asserts that they should be excluded from the total fee award.*fn62
B-K first asks that the court exclude time billed for FVC's motion to dismiss its d/b/a, Vision3, arguing that the motion "could have been avoided had Fresno Valves simply provided the information requested by counsel."*fn63 In granting FVC's motion and denying B-K's request for sanctions, however, the court explained that FVC had corresponded with B-K repeatedly regarding the legal status of Vision3 and that there was "no factual basis for B-K Lighting's assertion that defendants 'acted in bad faith...'."*fn64 B-K argues alternatively that the time billed to litigate the motion was excessive: "[t]wenty-seven hours, three partners and a senior associate were simply not warranted for analyzing the simple issue of whether the dba of its own client [ ] was the appropriate party to be sued and [for] drafting a motion to dismiss."*fn65 The court agrees that the staffing of the motion appears excessive. Accordingly, it will award FVC fees for hours expended by lead partner Mathiowetz and senior associate Birnschein for the dismissal motion, but not for hours expended by partners Wales or Cherian or paralegal Van Gaasb.*fn66 The total fees incurred for this work is thus reduced from $13,175 to $10,582.50, a subtraction totaling $2,592.50.*fn67
B-K next contends that FVC's claim construction-related fees should be reduced because it "took a number of frivolous and unnecessary positions."*fn68 Initially, FVC insisted that 29 claim terms were in dispute; B-K, by contrast, argued that only 9 required construction.*fn69 By the time of the Markman hearing, the parties' joint claim construction chart reflected 21 terms in possible need of construction: of these, B-K asserted that the court needed to address only 10, while FVC maintained that all required construction.*fn70 Ultimately, the court construed 10 terms;*fn71 it later observed that FVC's approach to claim construction unnecessarily complicated the litigation.*fn72
Consequently, the court concludes that a fifty percent reduction in FVC's claim construction-related fees is warranted. Using FVC's billing records, B-K has isolated the fees and costs billed for claim construction,*fn73 which total $96,383.44.*fn74 The court has checked this tabulation carefully and believes that it is accurate.*fn75 Accordingly, the court will subtract $48,191.72 from FVC's fee total.*fn76
B-K also claims that FVC's fee total should be reduced by $14,804.64,*fn77 the amount expended on its "frivolous motion to strike the expert report of Dr. John Pratt."*fn78 B-K argues that this motion was an effort to reargue the court's claim construction rulings;*fn79 FVC represented that B-K's submission of the Pratt infringement report alleged new grounds for infringement in violation of case management orders and discovery rules.*fn80 As noted, the court's summary judgment order on the patent claims did not reach the issue of infringement. At the time FVC filed its motion, however, it was not clear that the court would adopt this approach. Given the procedural posture of the case at the time FVC's motion to strike was filed, the court cannot conclude that it was frivolous. Accordingly, it declines to reduce the fee award for time billed preparing the motion.
B-K contends that FVC has billed for unnecessary or unsuccessful claims raised on summary judgment, and that these amounts ought be reduced.*fn81 The court has carefully reviewed FVC's billing record submissions, and concludes that an additional reduction beyond the § 17200 apportionment detailed above is unwarranted. Although FVC may have expended time and energy on claims that were not ultimately successful while engaged in summary judgment proceedings on the patent-in-suit, the court is not convinced that these claims were per se unnecessary. Most importantly, FVC ultimately prevailed on the patent-in-suit claim at the center of this litigation. The hours logged relating to FVC's summary judgment motion practice are, with the exception of the already-excised § 17200-related entries, reasonable, and will not be further reduced.
Next, B-K argues that FVC unnecessarily prolonged the case after the court's summary judgment orders, such that the approximately $242,374.83 in fees incurred after the issuance of these orders should be reduced.*fn82 The court has previously observed that FVC participated in uncooperative litigation tactics, particularly after summary judgment.*fn83 Nevertheless, B-K also obstructed the efficient resolution of this case.*fn84 Accordingly, the court will reduce FVC's post-summary judgment fees by fifteen percent, or $36,356.22.
B-K further argues that FVC should not recover fees incurred for work performed by Haynes Beffel & Wolfeld LLP.*fn85 B-K contends that FVC "had well-seasoned intellectual property lawyers representing it" at Howrey, and that it "provides no reason or justification for hiring the Haynes Beffel firm to assist Howrey."*fn86 Additionally, B-K alleges that, since the Haynes Beffel & Wolfeld attorneys "never appeared in the matter" and solely "advise[d] the Howrey lawyers," their work "is more akin to the work of non-testifying experts, [fees for which] are not recoverable under § 285."*fn87 B-K cites no legal authority for the novel proposition that counsel retained to advise lead litigators in a complex patent suit are somehow converted to non-testifying experts who cannot recoup fees. Contrary to B-K's assertion, FVC has explained that Haynes Beffel & Wolfeld is outside counsel to FVC; that the firm focuses on patent, trademark, and copyright law; and that FVC retained Haynes Beffel & Wolfeld to assist litigation counsel in this matter.*fn88 FVC has submitted detailed time records relating to hours billed by counsel from Haynes Beffel & Wolfeld.*fn89 Having carefully reviewed these entries, the court concludes that the hours expended were reasonable and not redundant or otherwise unnecessary. Consequently, it declines to cut these fees from FVC's overall award.
Finally, B-K asserts that FVC spent an exorbitant amount of time -- 479 hours -- on its fees-on-fees work.*fn90 Having reviewed the FVC billing entries B-K isolated and summed to reach this figure, however, the court believes it to be inflated.*fn91 Nevertheless, the court agrees that the time billed for this aspect of the litigation includes unnecessary and redundant work. Accordingly, the court will reduce the total amount billed for fees-on-fees work, as summed by B-K in Exhibit A to the Trusso declaration, by fifteen percent, or $27,247.69.
c. Fees Related to Damages Consultation by Dr. Mody and Mr. Scoppettone
Next, B-K claims that FVC impermissibly attempts to recoup expert witness fees "by characterizing damage experts Dr. Nisha Mody and Mr. Marc Scoppettone as 'non-attorney staff' in its fee submission."*fn92 As support for this contention, B-K submits printout biographies for Mody and Scoppettone, who are financial analysts with CapAnalysis, LLC.*fn93 B-K argues that, because these consultants assisted FVC in preparing damages expert reports, they are themselves expert witnesses whose fees may not be recovered.*fn94
The Federal Circuit has held that, in view of the Supreme Court's decision in West Virginia Univ. Hosps., Inc. v. Casey, 499 U.S. 83 (1991), "the term 'reasonable attorney fees' does not include expert witness fees." Amsted Industries Inc. v. Buckeye Steel Castings Co., 23 F.3d 374, 377 (Fed. Cir. 1994). Expert witness fees must be calculated pursuant to 28 U.S.C. § 1920, not 35 U.S.C. § 285. Id.
Both extant precedent and 28 U.S.C. § 1920, however, emphasize that expert witnesses may not recover fees pursuant to § 285. Neither Mody nor Scoppettone were designated expert witnesses in this action; rather, FVC retained their consultant services to prepare reports of other individuals who did serve as defendant's expert witnesses. B-K's argument regarding fees associated with these analysts is unavailing, and the court declines to cut their fees from the total recoverable fees award.
d. B-K's Objection to FVC's Redacted Time Entries
Next, B-K submits that FVC's records contain partially redacted and vague entries that "cannot be evaluated for reasonableness, appropriateness, or accuracy."*fn95 In view of these alleged deficiencies, B-K contends that "a one-half reduction of the time in the general, redacted and vague entries is warranted."*fn96 FVC explains that entries "deemed as containing specific work product descriptions or reflecting attorney client communications have been redacted."*fn97
B-K correctly notes that courts do, at times, reduce fee awards when presented with heavily redacted time entries. See, e.g., World Triathalon Corp. v. Dunbar, 539 F.Supp.2d 1270, 1285 (D. Haw. 2008) ("This reduction is further justified because of counsel's heavily redacted entries [citing Local Rule]"). Having reviewed the submitted records, however, the court concludes that FVC's redactions are appropriately limited and do not impede an assessment of the overall fee award requested. The vast majority of the time entries are not redacted at all, and not a single one of 775 fee-related entries is redacted entirely. In addition, the court finds the narrative descriptions for each time entry more than adequate to ascertain how the time logged was used. Accordingly, it declines to reduce FVC's fee award for vagueness or overredaction.
e. B-K's Request that FVC's Fees Be Reduced for Alleged Misconduct
Finally, B-K argues that FVC's "discovery abuse"*fn98 and behavior regarding mediation*fn99 amounts to misconduct which merits additional cuts to the fees requested. As detailed in the court's prior orders, both parties refused to cooperate and engaged in unprofessional behavior that unnecessarily complicated this litigation. At multiple junctures, each party has moved to sanction the other, which the court has declined to do in light of this mutual misconduct. Once again, the court declines to sanction one party and not the other for both sides' acrimonious behavior.
For the reasons stated, the court grants FVC's motion for attorneys' fees. The requested fee award is first reduced by twenty percent, to $951,621.38, excising fees and costs associated with the § 17200 claim. This award is further reduced as follows:
Motion to Dismiss d/b/a -$2,592.50
Claim Construction -$48,191.72
Post-Summary Judgment Fees -$36,356.22
TOTAL FEES AWARDED:$837,233.25