A recent New Jersey Law Journal story, “Judge OKs Fees in Kayak.com Suit but Balks at K&L Gates’ Rates” reports that a federal judge in Camden, NJ has ruled that the operator of travel website Kayak.com is entitled to a partial fee award after emerging as the victor in a patent infringement suit.  But the judge found Kayak's counsel at K&L Gates failed to demonstrate that their hourly rates of up to $781 were reasonable.

U.S. District Judge Noel Hillman of the District of New Jersey granted in part the motion by Kayak Software Corp. seeking a declaration that a patent infringement suit by Source Search Technologies LLC was "exceptional" under 35 U.S.C. 285.  The judge found the "exceptional" label applied to all proceedings occurring after Kayak filed a motion for summary judgment of invalidity.

Source Search claimed in the suit, filed in June 2011, that Kayak infringed its '328 patent, which was entitled "Computerized Quotation System and Method."  The late U.S. District Judge Joseph Irenas dismissed the suit in July 2015 after finding that the '328 patent was invalid for claiming an abstract idea. Kayak then filed its motion to find the patent case "exceptional," based on the litigation conduct and allegedly meritless arguments made by the plaintiff.

Kayak claimed Source Search changed its position multiple times while litigating the case.  Hillman agreed, citing an instance where Source Search represented to the U.S. Patent and Trademark Office, regarding the '328 patent, that the claimed invention required two separate databases—a vendor database and a central computer that would pull quote terms from the vendor database.  The company stated to the PTO that pulling a price quote from the vendor database was "no small task" and "required a specific software interface" between the central computer and the vendor database, according to Hillman.

But a declaration submitted to the court by Pramod Pancha, an expert witness for Source Search, seemed to contradict the prior statement when it said "'software to perform a database query and pull specified items was well known and in wide use for many years'" before the '328 patent was filed, and that database query systems "'go back decades before that, and anyone with a basic software background would have known so at the time,'" Hillman said.

Hillman found the two statements at odds, adding that "the inconsistency is subtle, but it is apparent from the papers."  He agreed with Kayak that Source Search "changed its positions back and forth to suit the argument of the day."  Source Search should have dropped its case once Kayak moved for summary judgment on validity, and the failure to do so was unreasonable conduct, Hillman said.

Kayak sought reimbursement for five attorneys from the Boston office of K&L Gates who represented it in the case.  The company didn't seek reimbursement for the work of Rosemary Alito of K&L Gates' Newark office, who served as local counsel.

To provide a prevailing rate, Kayak referred to a 2013 report from the American Intellectual Property Law Association, but it failed to provide the court with a copy of the report, instead referring Hillman to a website where the report is available for a fee.  Kayak said the report indicated that hourly rates for all intellectual property work nationwide range from $267 to $768.  But Kayak sought $781 per hour for K&L Gates partner John Cotter, which is outside the range, Hillman noted.  Kayak sought rates from $337 to $682 for four other attorneys working on the case.

Kayak offered no evidence other than the declaration of its own attorney to support the award of a fee above the average range, Hillman said.  He also found timekeeping records for the case lacking in detail.  He gave the company leave to file additional support within 14 days for its fee requests.  He also gave Source Search seven days after that point to file objections to the number of hours requested.