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T&M Inventions, LLC v. Acuity Brands Lighting, Inc.

United States District Court, E.D. Wisconsin

December 27, 2016

T&M INVENTIONS, LLC, Plaintiff,
v.
ACUITY BRANDS LIGHTING, INC. and ABL IP HOLDING, LLC, Defendants.

          DECISION AND ORDER

          William C. Griesbach, Chief Judge.

         Title 35 U.S.C. § 285 allows an award of attorneys' fees in “exceptional cases.” On September 21, 2016, I declared that this was such a case and ordered Acuity to pay T&M's reasonably incurred attorneys' fees and expenses. T&M now seeks a total of $926, 263.64 in attorneys' fees and other expenses. For the reasons below, T&M is entitled to receive attorneys' fees and other expenses totaling $849, 324.74.

         BACKGROUND

         The facts of the underlying action are set forth more fully in the court's Findings of Fact and Conclusions of Law and Order for Judgment. (ECF No. 51.) In brief, T&M filed this patent infringement suit in August 2014. It sought judgment declaring that its patents and Acuity's patent are interfering patents and that Acuity's patent is invalid. On June 1, 2016, the court invalidated Acuity's patent. The court found on September 21, 2016 that this was an “exceptional” case pursuant to 35 U.S.C. § 285 and granted T&M's motion for attorneys' fees and nontaxable costs incurred in the case.

         LEGAL STANDARD

         A court calculates attorneys' fees using the “lodestar” amount: “the number of hours that any attorney worked on the case multiplied by a reasonable hourly rate.” Jeffboat, LLC v. Director, Office of Workers' Compensation Programs, 553 F.3d 487, 489 (7th Cir. 2009) (citing Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Mathur v. Bd. of Trs. of S. Ill. Univ., 317 F.3d 738, 742 (7th Cir. 2003)). The court may then adjust the figure depending on a variety of factors, including the time and labor required, the novelty and difficulty of the issue, the degree of the success achieved, the experience and ability of the attorneys, the amount involved and the results obtained, and awards in similar cases. Hensley, 461 U.S. at 429-30 n.3. The party seeking an award of attorneys' fees bears the burden of proving the reasonableness of the fees. Spegon v. Catholic Bishop, 175 F.3d 544, 550 (7th Cir. 1999) (citation omitted).

         ANALYSIS

         A. General Objections to Attorneys' Fees

         Acuity begins by raising general objections to T&M's fees which I will address at the outset. First, Acuity argues that the fees T&M seeks in this case are facially unreasonable. Courts in this circuit have routinely relied on the American Intellectual Property Law Association (AIPLA) survey to determine the reasonableness of requested fees. See, e.g., Intellect Wireless, Inc. v. HTC Corp., No. 09-C-2945, 2015 WL 136142 (N.D. Ill. Jan. 8, 2015); Marctec, LLC v. Johnson & Johnson, 07-CV-825-DRH, 2010 WL 680490 (S.D. Ill. Feb. 23, 2010); Eli Lilly & Co. v. Zenith Goldline Pharm., Inc., 264 F.Supp.2d 753 (S.D. Ind. 2003). The AIPLA survey “examines the economic aspects of intellectual property law practice, including individual billing rates and typical charges for representative IP law services.” (ECF No. 88-4 at 5.) Indeed, both parties rely on the AIPLA survey to argue their respective positions.

         T&M asserts that its fees are reasonable under AIPLA standards because they fall below the median total costs in the AIPLA survey. According to the survey, the average total cost of patent infringement litigation where between $1, 000, 000 and $10, 000, 000 is at stake is $2, 000, 000. (ECF No. 88-4 at 41.) T&M contends that although it did not seek damages, it entered into an exclusive license agreement with a third party, BlueScope Buildings North America, Inc. (BBNA), for its use of the patented invention. Under the agreement, BBNA has paid royalties totaling $2, 589, 064.44. T&M claims $1, 350, 000.00 of the royalties have been paid since the case was filed in August 2014. (McLain Decl. Ex. A, ECF No. 92-1.) As such, if the court uses this amount as a benchmark, T&M's total costs, $926, 263.64, were approximately $1, 000, 000 lower than the AIPLA's reported median.

         Conversely, Acuity argues that the AIPLA survey data shows that T&M's request is unreasonable. Acuity claims that the court should look at the total cost of cases involving less than $1, 000, 000, where the median total cost is $600, 000. It asserts that cases involving more than $1, 000, 000 are generally more complex than the case here. In this case, Acuity notes that the trial to the court lasted only three days. The parties conducted limited discovery and did not retain any expert witnesses who testified at trial.

         T&M counters that extensive discovery was not required because it was able to utilize most of the materials produced in a previous case, T&M Inventions LLC v. Acuity Brands Lighting Inc., 12-CV-0091. Even though most of the work was completed in the first case, T&M notes that it was still required to review and analyze that work here. It contends that the shifting character of Acuity's defense and the relatively esoteric area of law involved justify the attorneys fees and expenses claimed.

         Ultimately, I conclude that T&M has shown that based on the royalties they receive under the licensing agreement for the patented invention, the amount at stake in this case was between $1, 000, 000 and $10, 000, 000. While Acuity's criticisms arguably warrant some adjustment, T&M's overall request is reasonable as reflected by the data in the AIPLA survey.

         Second, Acuity argues T&M's fees are unreasonable because they are 125% greater than Acuity's total fees and costs. But it is not unreasonable for the plaintiff's fees to exceed the defendant's in a case like this where T&M had the burden to prove the invalidity of Acuity's patent by a preponderance of the evidence. Medichem, S.A. v. Rolabo, S.L., 437 F.3d 1157, 1169 (Fed. Cir. 2006). In order to meet its burden of proof, T&M was arguably more likely to have higher fees than Acuity. In hindsight, it is often easier to criticize the amount of work expended on behalf of a client as excessive, but until the conclusion of the case and the rendering of a final verdict, attorneys do not know what the judge or jury is thinking and it is ...


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