In a case in which a federal judge had to determine the reasonable rate charged by patent attorneys in Pittsburgh, a defendant in an infringement case was awarded less than half of its requested attorney fees despite repeated failures by the plaintiff to comply with local patent rules.
U.S. District Court Judge Terrence F. McVerry of the Western District of Pennsylvania awarded Accuray Inc. $43,134 in attorney fees for work done by lawyers in Pittsburgh, New York and California on motions to compel initial disclosures and infringement contentions and on motions for an extension of time and to enforce an earlier order.
The award was less than half of the more than $107,000 in fees the company was seeking and reduced the partners’ rates by more than $150 an hour.
In his opinion in Best Medical International Inc. v. Accuray Inc. , McVerry said Best Medical International had a “lackadaisical approach” to its infringement case against Accuray and “repeatedly” failed to comply with local patent rules. Accuray was forced to file a motion to compel initial disclosures. That motion was granted June 30 and included a chastisement of BMI from the court, McVerry said.
Accuray then had to file a motion to enforce that June 30 order, a third motion to compel adequate infringement contentions and another motion seeking an extension of time to file its responsive non-infringement contentions, he said.
On Aug. 19, McVerry issued an order concluding BMI had failed to comply with the letter or spirit of local patent rules and authorized Accuray to submit a petition for reasonable fees and costs it incurred in connection with each of the four motions. The company was also allowed to submit fees for the time it took in preparing the fee petition.
Three lawyers and a paralegal submitted their fees.
Madison Jellins is based in California and began her representation of Accuray in this case while she was a partner at Alston & Bird, where she charged $625 an hour. She has since moved to Helix IP, where she charges $550 an hour. She has 21 years’ experience. Janice Christensen is a senior associate at Alston & Bird in New York with eight years’ experience and bills $525 an hour.
Kirsten R. Rydstrom is a partner at Reed Smith in Pittsburgh and has 15 years’ experience. She charges $565 an hour. Reed Smith senior paralegal Lisa Santucci charges $295 an hour, according to the opinion.
In total, the attorneys and paralegal sought reimbursement of more than $107,000 for more than 211 hours worked, plus $63 in costs, McVerry said.
The judge said, however, that Accuray failed to provide an itemized listing of the tasks performed by any of the four timekeepers despite more than one opportunity to do so.
Accuray also failed, BMI argued, to establish the going rate for a Pittsburgh-area patent attorney.
BMI argued Jellins and Rydstrom’s hourly rates should be reduced to $365 an hour, Christensen’s be reduced to $200 an hour and Santucci’s rate be reduced to $100 per hour. BMI also suggested the number of hours be reduced by 35 percent. The company said Accuray failed to establish the prevailing rate and failed to provide detailed information regarding the tasks performed.
In his legal analysis, McVerry relied on the court’s 2011 decision in NFL Properties LLC v. Wohlfarth , in which he had articulated the standards for fee petitions in the circuit. The analysis includes a lodestar calculation of reasonable rates in the relevant legal community multiplied by reasonable hours. As the hourly rate goes up, he said, there should be a corresponding decrease in the amount of time required to accomplish a task because of the attorney’s experience and expertise.
BMI first argued Accuray should only recover fees for work on the motion to enforce and the motion to compel infringement contentions. McVerry dismissed this argument, finding it “entirely fair” to impose fees related to all of the motions given BMI’s “repeated failure” to comply with patent rules.
When it came to determining the reasonable hourly rate in Pittsburgh, McVerry said Accuray failed to submit evidence to prove the rates from the attorneys in all the locations are reasonable by Steel City standards. He dismissed a belated submission by Accuray of an affidavit filed in a separate, unrelated case before the court — Air Vent Inc. v. Vent Right Corp. — in which an attorney said $350 an hour was a reasonable rate for experienced patent litigators in Pittsburgh.
Because Accuray failed to meet its burden of proof, McVerry said the court was left to determine a reasonable rate. He gave Jellins and Rydstrom a rate of $400 an hour, Christensen a rate of $250 an hour and Santucci a rate of $150 an hour.
“These rates are comparable to the rates used in NFL Properties for an associate attorney and paralegal with similar years of experience and well within the market range identified by” the attorney in Air Vent , McVerry said.
When it came to the number of hours expended on these motions by Accuray’s attorneys, McVerry said that “at first blush” they appeared “excessive, particularly in light of counsel’s experience and claimed hourly rates.”
McVerry summarily dismissed Accuray’s argument that BMI was “‘in no position’” to judge whether the lawyers’ time was excessive. He said it is the court’s role to determine whether the time was excessive and Accuray didn’t give it enough information to do so.
McVerry said it would be inappropriate to award fees related to the underlying review of initial disclosures and infringement contentions because Accuray would have to have done that even if BMI complied with its obligations. He said it also appears, from the similar number of hours spent by Jellins and Christensen, that the two might have duplicated efforts or inefficiently distributed work.
“It appears that Jellins may have actively participated in the actual research, preparation and drafting rather than performing a more traditional review and approval role,” McVerry said. “The participation of three experienced attorneys in different locations likely also contributed to inefficiencies which are not fairly passed on to BMI.”
McVerry reduced the number of hours by 30 percent. He also found that because the fee petition did not help the court in its analysis, Accuray could not collect fees in connection with the petition.
Under McVerry’s revised lodestar analysis, he awarded Alston & Bird counsel fees generated by Jellins and Christensen in the amount of $38,206. He awarded Rydstrom and Santucci of Reed Smith a total of $4,928 plus the $63 in costs.
BMI is represented by Eric Soller of Pietragallo Gordon Alfano Bosick & Raspanti in Pittsburgh. Calls to Soller, Jellins and Rydstrom were not returned.
(Copies of the 14-page opinion in Best Medical International Inc. v. Accuray Inc., PICS No. 11-4514, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.)