Judge Recommends Gutting Attorney Fees in IP Case
April 11, 2023
A recent Law 360 story by Rachel Riley, “Ohio Judge Guts Counsel Fees in Archery Row IP,” reports that an Ohio federal magistrate judge has recommended slashing attorneys' request for fees and expenses by more than half when awarding an archery company for a default win in a bow patent and trademark dispute, saying the out-of-town lawyers were pricier than the district where they argued the suit. U.S. Magistrate Judge Chelsey M. Vascura suggested that the court award Wisconsin-based MCP IP LLC about $109,000 in attorneys fees and some $1,500 in legal costs – a fraction of the nearly $240,000 total the company requested last month.
MCP alleged in a 2021 suit that Ohio outdoor retailer .30-06 Outdoors LLC and archery equipment brand Daibow Inc. ripped off more than a dozen of its bow patents for various designs and utilities and infringed its associated trademarks. Last August, the federal district court ruled that the two accused archery companies had admitted to those allegations, by default, by failing to respond to the claims over the course of 18 months. Judge Vascura agreed with MCP that the case met the "exceptional" threshold for awarding attorneys' fees in patent cases; however, the magistrate judge recommended cutting the proposed $168,631.95 attorney fee award by about $60,000 for two reasons.
First, Judge Vascura suggested a downward adjustment to the lodestar because the lead attorneys on the case, Kadie M. Jelenchick and Michelle A. Moran of Foley & Lardner LLP, are based in Milwaukee and thus charge more than average billing rates for intellectual property attorneys in the Southern District of Ohio. Altogether, the legal team charged the plaintiffs for 314 hours of work on the case, with hourly rates between $330 and $700.
Second, Judge Vascura recommended reducing the lodestar because the lawsuit was only partially successful. MCP was awarded about $80,500 in damages – less than half of the $168,500 it sought — and the court denied the company's request for a preliminary injunction barring the defendants from further patent infringement, the judge said.
In a March 23 motion for attorneys' fees, MCP argued that the defendants' failure to appear in court and other bad-faith legal tactics made for exceptional circumstances. Since the lawsuit was filed, the plaintiff alleged, .30-06 Outdoors' published a defamatory statement claiming the suit was racially motivated. According to Judge Vascura's recent report, though, that statement was later deleted at the request of MCP's counsel.
Judge Vascura recommended that the court largely deny MCP's request for another $70,118.77 in litigation expenses, which MCP had only described as "consisting largely of professional services provided by local counsel and MCP IP's damages expert." "Indeed, beyond a monthly total of fees paid to its damages expert and local counsel (along with modest expenses associated with mailing, parking, travel, and meals), Plaintiff provides no explanation of how these fees were calculated or the services for which these fees were incurred," Judge Vascura said.
If MCP sought reimbursement for fees paid to its local counsel, the company should have included those billing records with its attorneys fee request so the court could determine if they were reasonable, Judge Vascura said. And though the law authorizes award of attorneys fees to winners of exceptional patent cases, it does not make the same allowance for expert witness fees, the judge said. The attorneys fees already awarded should be enough to cover any additional costs created by the defendants' uncooperative behavior, Judge Vascura said. She recommended standard expert witness fees of $40 a day for each day the damage expert spent attending a hearing plus any travel days, totaling $120.