A recent Law 360 story by Dorothy Atkins, “BladeRoom’s $21M Fee Bid for IP Win Sent to Special Master,” reports that a California federal judge said he’ll appoint a special master to review BladeRoom's billing records and decide whether Emerson Electric Co. owes the data center manufacturer $21 million in attorney fees after a jury found the company used stolen trade secrets to land a $200 million Facebook contract.

During a hearing in San Jose, U.S. District Judge Edward J. Davila said he doesn’t have the staff or time to review all of the billing records of BladeRoom Group Ltd.'s counsel to determine if $21 million in attorney fees and $3.5 million in costs is appropriate and warranted, but he said a special master would be able to do it efficiently.  The judge also acknowledged that close review of the records is warranted, given the large amount in fees that BladeRoom is seeking.  “Nobody is indicating that this is an insignificant amount of fees in this case,” the judge said. “The plaintiffs say in their motion it’s a big number, because it’s big work done.  We all recognize it’s a large number."

Judge Davila suggested he appoint a local retired state judge, James P. Kleinberg, to serve as a special master, but he gave the parties until Aug. 13 to suggest alternatives.  He said he’ll appoint one within the next few weeks.  The fee request is the latest in a hotly contested legal battle that the U.K.-based BladeRoom launched in March 2015 against Facebook and Emerson. In the suit, BladeRoom accused the pair of stealing its method for manufacturing and installing prefabricated data centers, which it had pitched separately to both Facebook and Emerson in 2011.  After those meetings, BladeRoom claimed the two larger companies began secretly working together to steal BladeRoom's proprietary techniques for the Facebook project.

Facebook settled BladeRoom’s claims mid-trial in April 2018 and a month later, a jury found that Emerson owed BladeRoom $30 million for willfully using two of four asserted trade secrets to build a Facebook data center in Lulea, Sweden.  In March, Judge Davila found that the California Uniform Trade Secrets Act entitles BladeRoom to reasonable attorney fees and costs, but he didn’t determine the amount owed at the time.

In its motion for fees, BladeRoom said it's owed $21 million in fees and $3.5 million in costs to cover its litigation expenses and the time the company’s attorneys spent conducting a year-long investigation leading up to its suit.  But in its opposition, Emerson argued BladeRoom's “staggering” fee request is too high, unprecedented and unjustified, particularly because BadeRoom was only successful on two of the 29 trade secrets it originally asserted against the company.  “There is simply no fee award in an intellectual property case that even approaches what BladeRoom seeks here,” the opposition brief says.

During the hearing on the motion, Emerson’s counsel, Rudolph A. Telscher Jr. of Husch Blackwell LLP, also asked Judge Davila for the third time to let them review Facebook’s settlement so they can determine how BladeRoom's fee request compares to how much Facebook paid.  Telscher noted that if confidentiality is a concern, only the attorneys would review the deal, and they wouldn’t make the settlement public or show it to their client.

But Facebook’s counsel, Kristine Anne Forderer of Cooley LLP, disagreed, arguing that the settlement was entered with the understanding that the deal would be confidential.  Forderer noted that the record explicitly says the parties agreed to pay for their own litigation costs, so Emerson's counsel wouldn’t be learning anything new regarding BladeRoom’s fees.