August 10, 2017

The Sport of Kings: Federal Circuit Affirms $3.9 Million Fee Award for Two Week Trial on Patent Ownership

In AIA America, Inc. v. Avid Radiopharamaceuticals, [2016-2647] (August 10, 2017), the Federal Circuit affirmed the award of attorneys fees because: (1) the Seventh Amendment right to a jury trial does not apply to requests for attorney’s fees under § 285 of the Patent Act; (2) the district court did not err by making factual findings not foreclosed by the jury’s verdict on standing; and (3), AIA’s due process rights were not violated.

The Federal Circuit recounted an elaborate scheme perpetrated by plaintiff AIA and the purported sole inventor Mullan to appropriate for themselves inventions from Imperial College (Imperial) in London and the University of South Florida (USF).  The jury determined that USF did not knowingly and intentionally waive its ownership rights to the invention and that Hardy was a co-inventor.  Based on the jury’s verdict, the district court found AIA lacked standing to assert the U.S. Patent Nos. 5,455,169 and 7,538,258, and entered judgment in favor of Avid.  Avid then sought attorneys fees for the case (in which in which twelve witnesses testified and over 200 exhibits were introduced) of $6,508,687.00, and was awarded of $3,943,317.70.

The most interesting aspect of the case is the Special Master’s Report which trimmed the attorneys fees ask from $6.5 to $3.9 million.  Highlights of which include:

  • Reducing by more than half non-attorney time of more than 900 hours at an average rate of $227/hour for docketing and updating case files.
  • Eliminating 300 hours of attorney time ($67,000) for collecting documents, which the Special Master found to be a clerical task.
  • Cutting in half the $35,000 charged by the firms Case Manager/Training Coordinator for communications with the litigation team
  • Cutting by 66% the $470,000 in attorney time for assisting with the preparation of documents.
  • Cutting by 2/3 the $730,000 for preparing three witnesses for their trial testimony, in view of what the Special Master thought was “piling on”
  • Cutting by 2/3 the $633,000 spent on a motion for summary judgement on which more than 12 attorneys billed time
  • Cutting in half the $308,000 spent on motions in limine
  • Cutting in half the $240,000 spent on preparing the pretrial memorandum and preparation for the pretrial hearing
  • Cutting the 654 hours spent preparing the Exhibit List and Witness list by $100,000
  • Cutting by 2/3 the $414,400.50 (846 hours) for preparing an expert witness who was not called at trial
  • Cutting by half the $1,098,654.50 billed for attendance at trial, finding it difficult to understand the contribution of eight lawyers to the trial.
  • Cutting local counsels fees for merely attending the trial.

All in all, the Special Master reduced the fees requested by $2.9 million.  This still resulted in the $3.9 million award affirmed by the Federal Circuit, proving once again that patent litigation is the sport of kings, and that if you have to ask “how much,” you probably can’t afford it.