Howes v. Medical Components, Inc.

761 F. Supp. 1193, 17 U.S.P.Q. 2d (BNA) 1591, 1990 U.S. Dist. LEXIS 17191, 1990 WL 285681
District Court, E.D. Pennsylvania·Decided December 14, 1990·No. Civ. A. 84-4435·Published·Cited by 17 cases

Opinion

MEMORANDUM AND ORDER

HUYETT, District Judge.

This is a patent infringement action. On April 13, 1990, a jury found defendants liable for willful infringement of the patents in suit. By an order dated on May 22, 1990, I found that this was an “exceptional ease” under 35 U.S.C. § 285 and granted plaintiffs’ motion for attorney fees. 1

Pursuant to paragraphs 16 and 17 of the Final Judgment and Injunction dated on June 8, 1990, plaintiffs filed their petition for attorney fees and defendants filed their objections. On Wednesday, October 31, 1990, 1 held oral argument in open court on plaintiffs’ petition for attorney fees and rendered a bench opinion granting in part and denying in part plaintiffs’ petition.

This memorandum shall supplement my bench opinion rendered on October 31, 1990.

Pursuant to 35 U.S.C. § 285, plaintiffs submitted a petition for attorney fees, costs, and expenses in the amount of $2,037,935.77. In support of that petition, plaintiffs have submitted four affidavits plus supporting exhibits: (1) Affidavit of Albert E. Fey from Fish & Neave; (2) Affidavit of Richard F. McMenamin from Morgan, Lewis & Bockius; (3) Affidavit of Charles H. Lindrooth from Synnestvedt & Lechner; and (4) Affidavit Richard H. Smith from Finnegan, Henderson, Farabow, Garrett & Dunner.

Defendants raise approximately nine objections to plaintiffs’ petition for attorney fees. I shall discuss each of their objections seriatim.

*1195 I. Reasonable Hourly Rate

In Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), the United States Supreme Court provided the following general guidelines to courts for determining the amount of a reasonable fee:

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. The party seeking an award of fees should submit evidence supporting the hours worked and rates claimed. Where the documentation of hours is inadequate, the district court may reduce the award accordingly.
The district court also 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 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.

Id. at 433-34, 103 S.Ct. at 1939-40. The Federal Circuit in Devine v. Sutermeister, 733 F.2d 892 (Fed.Cir.1984), recognized the applicability of Hensley to any case “in which Congress has authorized the award of fees to a ‘prevailing party’.” Id. at 897 n. 4.

Although the amount of an award of attorney fees is assessed at the discretion of the district court, the court when determining such an award should keep in mind the philosophy underlying section 285:

The purpose of § 285 is, in a proper case and in the discretion of the trial judge, 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).

Generally, a reasonable rate corresponds to the prevailing market rates in the relevant community. Blum v. Stenson, 465 U.S. 886, 895, 104 S.Ct. 1541, 1547, 79 L.Ed.2d 891 (1984). Defendants contend that the relevant community in the present case is the area where the litigation took place—i.e. the Philadelphia area, and, therefore, that the rates submitted by plaintiffs must be reasonable when compared to the rates of patent attorneys in the Philadelphia area. See Water Technologies Corp. v. Calco Ltd., 709 F.Supp. 821, 824 (N.D.Ill.1989).

Some courts have allowed rates comparable to those prevailing at an attorney’s business location, but have done so only if the plaintiff has a good reason for using non-local counsel. See, e.g., National Gypsum Co. v. Steel Systems Int’l, Inc., 9 U.S.P.Q.2d 2073, 2075, 1988 WL 135780 (D.Or.1988); Playboy Enter., Inc. v. P.K. Sorren Export Co., Inc. of Florida, 221 U.S.P.Q. 124, 126, 1983 WL 178 (S.D.Fla.1983).

In the present case, I am satisfied that the relevant community for determination of reasonable hourly rates for Fish & Neave is New York City. When the possibility of litigation arose, both Dr. Howes’ patent counsel in Washington, D.C. and Arrow’s patent counsel in Philadelphia suggested to their respective client the New York City law firm of Fish & Neave and, in particular, attorney Albert E. Fey.

Fish & Neave, located in New York City, has been in existence for over one hundred years. The firm currently consists of approximately 102 attorneys. Thirty-one of the attorneys are partners and approximately 71 attorneys are associates. Fish & Neave specializes in complex litigation, and in particular, litigation of patent, trademark, unfair competition, and related cases conducted in Federal Courts throughout the country. Many of the cases handled by Fish & Neave are comparable in size and complexity to cases handled by the litigation departments of much larger New York City law firms. See Affidavit of Albert E. Fey at ¶ 14.

*1196 I believe that a party should be entitled to retain the most competent counsel available, particularly in the highly specialized area of complex patent litigation and particularly when its local counsel suggests using an out-of-state law firm for the purpose of litigation. Therefore, because I conclude that plaintiffs had a good reason for using non-local counsel, plaintiffs’ New York City counsel are entitled to recover the reasonable hourly rate for the New York City community.

Defendants also contend that, even if this court determines that Fish & Neave is entitled to the rate of pay that was standard in New York City during the relevant time periods, the rates requested by Fish & Neave are still unreasonable.

In Cunningham v. City of McKeesport,

Howes v. Medical Components, Inc., 761 F. Supp. 1193, 17 U.S.P.Q. 2d (BNA) 1591, 1990 U.S. Dist. LEXIS 17191, 1990 WL 285681 (E.D. Pa. 1990).

761 F. Supp. 1193 (Howes v. Medical Components, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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