Checkpoint Sys. Inc. v. All-Tag Sec. S.A., CIVIL ACTION NO. 01-CV-2223
| Decision Date | 02 November 2011 |
| Docket Number | CIVIL ACTION NO. 01-CV-2223 |
| Parties | CHECKPOINT SYSTEMS, INC. Plaintiff, v. ALL-TAG SECURITY S.A., ET AL. Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Presently before this Court are Defendant All-Tag Security S.A.'s Documents in Support of Attorneys' Fees and Costs (Docs. 304 and 305), Defendant Sensormatic Electronics Corporation's Documents in Support of Attorneys' Fees and Costs (Doc. 306), and Plaintiff's Objections thereto (Doc. 307). For the reasons set forth below, Plaintiff shall pay Defendant All-Tag Security S.A.'s Attorneys' Fees and Costs in the amount of $2,432,572.77 and shall pay Defendant Sensormatic Electronics Corporation's Attorneys' Fees and Costs in the amount of $4,151,147.21.
The case giving rise to this Order is a patent infringement action concerning a patent for disposable, deactivated resonance labels, which are used to provide protection from theft in department stores, supermarkets, and other businesses in the retail industry. In May 2001, Plaintiff brought suit against Defendants All-Tag Security S.A. ("All-Tag") and Sensormatic Electronics Corporation ("Sensormatic") for alleged infringement of its U.S. Patent No. 4,876,555 ("the '555 patent"). In February 2007, the case went to trial and a jury found in favorof Defendants. In an Order dated February 9, 2009 (Doc. 303), this Court found this case to be "exceptional" under 35 U.S.C. § 285 and ordered Plaintiff to pay Defendants their respective attorneys' fees, expenses, and pre-judgment and post-judgment interest.1 The Court further ordered Defendants to submit a bill of attorneys' fees and expenses incurred and ordered Plaintiffto file any objections to the bills within ten (10) days.
Defendant All-Tag submitted its bill of costs and attorneys' fees (Docs. 304 and 305) on February 20, 2009. All-Tag's attorneys' fees, expenses, pre-judgment interest and post-judgment interest total $2,432,572.77. Specifically, All-Tag's bills break down as follows:
+------------------------------------+
¦Attorneys' Fees ¦$1,607,506.71¦
+----------------------+-------------¦
¦Expenses ¦$191,127.42 ¦
+----------------------+-------------¦
¦Pre-judgment Interest ¦$633,578.81 ¦
+----------------------+-------------¦
¦Post-judgment Interest¦$359.83 ¦
+------------------------------------+
Not included in All-Tag's total is the post-judgment rate of $35.98 per day which is still accruing.
Defendant Sensormatic submitted its bill of costs and attorneys' fees (Doc. 306) on February 23, 2009. Sensormatic's attorneys' fees, expenses, pre-judgment interest and post-judgment interest total $4,201,147.21. Specifically, Sensormatic's bills break down as follows:
+------------------------------------+
¦Attorneys' Fees ¦$3,148,965.65¦
+----------------------+-------------¦
¦Expenses ¦$336,762.48 ¦
+----------------------+-------------¦
¦Pre-judgment Interest ¦$805,876.50 ¦
+----------------------+-------------¦
¦Post-judgment Interest¦$778.75 ¦
+------------------------------------+
Sensormatic's total figure includes a deduction of $91,236.17 representing the amount Checkpoint has already paid Sensormatic for the Clerk's taxation of costs. Not included in Sensormatic's total is the post-judgment rate of $55.63 per day which is still accruing.
On March 6, 2009, Plaintiff filed Objections to Defendants' All-Tag and Sensormatic Bills of Attorneys' Fees and Costs (Doc. 307). Plaintiff admittedly "does not challenge thespecific rates of Defendants' counsel or the reasonableness of the time spent on various particular tasks." (Pl. Objections 1.) Instead, Plaintiff raises four (4) objections to Defendants' petitions: (1) the conduct allegedly supporting the "exceptional case" finding does not justify anything more than a nominal award of attorneys' fees; (2) the Court should exclude legal fees and expenses incurred for matters on which Defendants did not prevail; (3) the Court should exclude legal fees and expenses filed by Defendant Sensormatic that were not related to any work or actual tasks counsel performed in the case (i.e., fees incurred prior to case filing, fees without descriptions of work, and a "litigation success" bonus); and (4) the Court should exclude legal fees and expenses filed by Defendant All-Tag that All-Tag did not actually incur, but rather, were incurred by a third party.
Under 35 U.S.C. § 285, the court, in exceptional cases, may award reasonable attorney fees to the prevailing party. The purpose of the statute is "to compensate the prevailing party for its monetary outlays in the prosecution or defense of the suit." Central Soya, 723 F.2d at 1578. Section 285 serves as a deterrent to "improper bringing of clearly unwarranted suits" for patent infringement. Mathis, 857 F.2d at 754.
The purpose of allowing Plaintiff to file objections to the bills of attorneys' fees and expenses is to permit Plaintiff to contest the reasonableness of the fees. See generally Armament Systems and Procedures, Inc. v. IQ Hong Kong Limited, 546 F. Supp 2d 646 (E.D. Wis. 2008) (). The starting point for a calculation of reasonable attorneys' fees is the "lodestar," that is, the number of hours reasonably expended multiplied by a reasonable hourly rate. Hensley v.Eckerhart, 461 U.S. 424, 433 (1983). The District Court should reduce the fees awarded by excluding hours that are excessive, redundant, unnecessary or otherwise not reasonably expended. Id. at 433-34. Additionally, other considerations may lead the district court to adjust the fee as necessary. Id. at 434. One such consideration is the result obtained. Id. When an adverse party has raised an objection to a fee request, "the district court has a great deal of discretion to adjust the fee award in light of those objections." Rode v. Dellarciprete, 892 F.2d 1177, 1183 (3d Cir. 1990). See, e.g.,Kimberly-Clark Corp. v. Johnson & Johnson, 745 F.2d 1437, 1458 (Fed. Cir. 1984) ().
Plaintiff does not challenge the reasonableness of the time spent on various tasks by defendants' counsel, nor does Plaintiff challenge the specific rate at which Defendants' counsel was paid. Plaintiff raises four objections to the attorneys' fees awarded Defendants: the conduct allegedly supporting the "exceptional case" finding does not justify anything more than a nominal award of attorneys' fees; the Court should exclude legal fees and expenses incurred for matters on which Defendants did not prevail; the Court should exclude legal fees and expenses filed by Defendant Sensormatic that were not related to any work or actual tasks counsel performed in the case (i.e., fees incurred prior to case filing, fees without descriptions of work, and a "litigation success" bonus); and the Court should exclude legal fees and expenses filed by Defendant All-Tag that All-Tag did not actually incur, but rather, were incurred by a third party. These will be discussed in turn.
Plaintiff's first objection, that the conduct supporting the finding of an "exceptional case" under 35 U.S.C. § 285 cannot justify more than a "nominal award" of attorneys' fees, is a thinly veiled and untimely attempt to have this Court reconsider the "exceptional case" finding already rendered. 35 U.S.C. § 285 provides that "[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party." In an Order dated February 9, 2009 (Doc. 303), this Court found this case to be "exceptional" under 35 U.S.C. § 285 and ordered Plaintiff to pay all reasonable attorneys' fees to Defendants. Thus, Plaintiff's initial objection is merely an attempt to have this Court reconsider its decision. By not raising this argument in a properly filed motion for reconsideration within ten (10) days of the Court's Order as required by Local Rule 7.1(g), Plaintiff has waived this objection.
Plaintiff's second objection urges the Court to exclude legal fees and expenses incurred for matters on which Defendants did not prevail. (Pl. Objections 12.) Specifically, Plaintiff asks the Court to exclude $298,837.94 of Defendant All-Tag's fees and costs and $788,241.46 of Defendant Sensormatic's fees and costs for the following matters that Plaintiff claims were "lost" by Defendants: (1) Summary Judgment Motion for Incorrect Inventorship; (2) Appeal to the Federal Circuit; (3) Claim construction of the '555 Patent; and (4) Summary Judgment Motions for Non-Infringement, Laches, and Equitable Estoppel Defenses. (Pl. Objections 12-14.)
Under 35 U.S.C. § 285, "[t]he court in exceptional cases may award reasonable attorneyfees to the prevailing party." Mathis, 857 F.2d at 756 (citing Hensley, 461 U.S. at 435). A defendant is a "prevailing party" only if a court finds that the plaintiff's claim was frivolous, unreasonable, groundless, or brought in bad faith. System Management Inc. v. Loiselle, 154 F. Supp 2d 195, 200 (D. Mass. 2001) (citing Christiansburg Garment Co. v. Equal Employment Opportunity Comm'n, 434 U.S. 412 (1978)).
In the present case, the District Court has already found Defendants...
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