A recent Law 360 story by Kelly Lienhard, “Traxcell Asks High Court To Review Atty Fee Fight”, reports that Traxcell Technologies LLC has asked the U.S. Supreme Court to take up an appeal concerning attorney fees owed to Sprint and Verizon after the telecommunication companies beat its infringement suit, arguing that the alleged "exceptional" litigation conduct occurred before a final ruling.

A  petition for a writ of certiorari from Traxcell, which filed for bankruptcy earlier this year, claimed that the Federal Circuit erred when it affirmed attorney fee awards to units of Sprint Corp. and Verizon Communications Inc. based on so-called "baseless" litigation conduct from Traxcell's attorney, William Ramey III of the Houston firm Ramey LLP, as the conduct in question occurred before the court adopted a magistrate judge's ruling.

"It is black letter law that a Magistrate's ruling is not final until approved by a district court.  It was [an] error for the Panel to base its fee award entirely upon rulings that were not final and could not have been final until December 11, 2019," Traxcell said.  "None of the conduct that was found to be "exceptional" under [federal law] occurred after the Magistrate Judge's recommendation was made final on December 11, 2019."

Texas-based Traxcell, which has been accused of being a "patent troll" by groups like the Electronic Frontier Foundation, is on the hook for about $784,000 in fees owed to Sprint and $132,000 in fees owed to Verizon, after the companies won rulings that Traxcell's patent lawsuits were legally frivolous.  AT&T Inc., which had also been named in those lawsuits, did not request any fees, as it ended its litigation with Traxcell back in 2019.  A panel of Federal Circuit judges ruled in July without comment that the lower court was right to order Traxcell to pay legal fees incurred by lawyers for the major telecom firms.

Traxcell is now appealing that decision based on arguments that the Federal Circuit departed from typical proceedings and court precedent by issuing fee awards based on conduct that occurred before U.S. Magistrate Judge Roy Payne's ruling in a separate, but related, case was finalized.

Traxcell is asking the high court to either vacate or reverse the attorney fees granted to both Sprint and Verizon and find that the case was not exceptional.  Verizon and Sprint, the latter now owned by T-Mobile, moved to dismiss the bankruptcy attempt, telling the court that it was filed in bad faith.

A recent Law 360 story by Lauren Berg, “Columbia Univ.’s IP Win Grows to $600M With Fees, Interest”, reports that Columbia University and NortonLifeLock Inc. told a Virginia federal judge that the university should receive nearly $120 million in attorney fees and interest in an infringement case over anti-malware patents, bringing Columbia's total award to just over $600 million.  U.S. District Judge M. Hannah Lauck on Sept. 30 nearly tripled a jury's $185 million willful infringement verdict, bringing the total to more than $481 million, while ordering Norton — now known as Gen Digital Inc. — to pay attorney fees for its litigation misconduct.  She also held its counsel at Quinn Emanuel Urquhart & Sullivan LLP in contempt for not complying with a court order involving a witness whose testimony has been controversial.

In a stipulation, Columbia and Gen Digital agreed the university would receive nearly $20.7 million in attorney fees, $4.8 million in supplemental damages, $71 million in prejudgment interest and $22 million in post-judgment interest, among other costs, for a total award of $600 million.  However, Gen Digital has appealed the judgment to the Federal Circuit, and the parties have agreed they retain all rights, in the event that the court's final judgment is reversed, modified or vacated, according to the stipulation.  Gen Digital has also obtained a $600 million bond to stay execution of the judgment while the appeal plays out, the parties said.

The unanimous jury reached its verdict in May 2022 after three days of deliberation, following a two-week trial in the case brought by Columbia in December 2013.  The jury found that Gen Digital infringed two patents related to cybersecurity safeguards developed by Columbia's professors.  They also found that the intellectual property theft was willful, allowing the court discretion to treble the damages up to $555 million.  In her final judgment in September, Judge Lauck elected to multiply the jury's verdict by 2.6.

In a sanctions opinion unsealed earlier this month, the judge outlined years of "abhorrent litigation conduct" by Gen Digital's attorneys at Quinn Emanuel and found that when Latham & Watkins LLP took over as lead counsel for the company it likewise "impeded" the litigation.  "Norton's second lead counsel, Latham, poured fuel on the fire," the opinion stated, adding soon after that "the pattern of questionable conduct thus outlasted Quinn's direction of the litigation."

While Latham escaped sanctions, Judge Lauck cited an "extensive and unprecedented record" of "disquieting conduct of both sets of Norton's attorneys."  Quinn has represented Norton in the nearly decade-long litigation, while Latham was brought in two weeks before trial.  In just a single paragraph of her 42-page opinion, the judge ripped into Latham, stating that its attorneys "hid key communications" regarding Saudi Arabia-based expert Marc Dacier, who was central to the pretrial misconduct dispute.  Latham joined the case two weeks before trial but was still found to have acted improperly.

A recent Law 360 by Emily Sawicki, “Co. Held in Contempt For Failing To Pay $1M Atty Fee,” reports that a New Jersey federal judge has issued a contempt order against an India-based supplement company for failing to pay discovery misconduct fees and blocked its legal counsel from withdrawing, a year after the company was ordered to pay more than $1 million to opposing counsel following patent infringement claims dating back to 2015.  U.S. District Judge Robert B. Kugler found Prakruti Products Pvt. Ltd. in civil contempt, citing the $994,803.29 in discovery misconduct fees Prakruti still owed to Sabinsa Corp.

Judge Kugler issued an order on April 12 giving Prakruti until April 18 to issue payment.  As of oral argument on May 1, Prakruti had paid just $8,671 of what had been more than $1 million in outstanding fees toward Sabinsa, in order for the plaintiff to pay back $878,548.56 in ArentFox Schiff LLP law firm fees, $15,120 in "Indian-law counsel fees," $96,750.50 in Saiber LLC law firm fees and $13,035.23 in costs.

Judge Kugler ordered the clerk of the District of New Jersey's Camden Vicinage to enter default against Prakruti on Sabinsa's claim that Prakruti violated a 2015 settlement agreement between the two entities, and converted a summary judgment briefing, set to take place in May, into a briefing on Prakruti's default judgment.

In his order, Judge Kugler specified that, although Prakruti's attorneys, Gregory A. Krauss and James T. Wilson of Davidson Berquist Jackson & Gowdey LLP and Jason B. Lattimore of the Law Office of Jason B. Lattimore, would not be permitted to withdraw, "Prakruti's attorneys are not held jointly or severally liable with Prakruti for the remainder of the discovery misconduct fees."

The three had filed a motion to withdraw from their representation on April 14 and Lattimore provided reasoning in a letter dated April 25, saying, "a conflict of interest has arisen between Prakruti, on the one hand, and its current counsel, on the other," citing a pro se, ex parte letter entered into the docket by a Prakruti company director.  "It appears that Prakruti intends to shift blame for its current predicament from itself to its counsel for their supposed failure to provide 'proper representation,'" Lattimore wrote of the company's letter.

The fee amount itself was a point of contention, after then-U.S. Magistrate Judge Karen M. Williams calculated an initial award of about $879,724 to the ArentFox Schiff lawyers in November 2021, recalculated to $878,548 by U.S. Magistrate Judge Sharon A. King, in April 2022.  The award stems from an underlying patent infringement case brought by New Jersey-based Sabinsa, which claimed Prakruti was violating its patent by selling a turmeric supplement.

During a "contentious" discovery process, Judge Williams found that "Prakruti had withheld certain information from Sabinsa and also spoliated pertinent evidence," according to court documents.  The judge sanctioned Prakruti with an adverse inference, finding that Sabinsa's legal efforts to prove Prakruti's misconduct warranted an award of attorney fees against Prakruti.

A recent Law 360 story by Tiffany Hu, “High Court Asked to Review $5M Atty Fees in Fracking IP Suit,” reports that the U.S. Supreme Court has been asked to look into whether the Federal Circuit created "uncertainty and confusion" when it affirmed that a patent dispute over fracking technology was exceptional and warranted granting $5 million in attorney fees.  In a Jan. 12 certiorari petition, Heat On-The-Fly LLC said that the Federal Circuit erred in affirming a North Dakota federal judge's decision that its lawsuit against Energy Heating LLC and other companies was the kind of "exceptional" case that merited attorney fees.

Heat On-The-Fly had argued that the district court failed to take into account the "manner" in which the company litigated the case — including that it did not engage in litigation misconduct — but the Federal Circuit said in October that the lower court "properly considered the totality of the circumstances."  In doing so, Heat On-The-Fly said that the appeals court "ignore[d] the distinction between 'the substantive strength of a party's litigating position' and 'the unreasonable manner in which the case was litigated," citing the high court's 2014 Octane Fitness ruling.

The "decision in this case creates uncertainty and confusion regarding the factors that district courts must address and consider in order to properly exercise their discretion and consider the 'totality of the circumstances' when determining exceptionality," the petition states.

After a bench trial in 2016, U.S. District Judge Ralph R. Erickson found that Heat On-The-Fly's patent was unenforceable because the company and inventor Ransom Mark Hefley knowingly did not tell the U.S. Patent and Trademark Office when they filed a patent application for the concept in September 2009 that the invention had been in use as early as October 2006.  The district judge later rejected Energy Heating's motion for attorney fees, but the Federal Circuit in 2018 said the judge erred in refusing the request because he did not explain his decision, though it affirmed that the patent was unenforceable due to inequitable conduct.

A recent Law360 story by Sameer Rao, “Judge Told to Slash ‘Friday The 13th’ Writer’s $1.2M Atty Fees,” reports that the fees that screenwriter Victor Miller seeks for the prominent copyright attorney who secured his win for the rights to his "Friday the 13th" script are needlessly high and based on improper tactics, according to opposition counsel's memorandum.  The filing that calls for the fee bid's rejection drew from some of the accusations that Horror Inc., the Massachusetts company that owns the successful slasher film franchise that grew from Miller's 1980 screenplay, and co-plaintiff Manny Co. made against Miller's lawyer Marc Toberoff of Malibu, California-based Toberoff & Associates PC.

Among the memo's allegations is that about 15% of the $1.18 million attorney fees request is based on Toberoff's "procedurally improper motion" that used California's law prohibiting strategic lawsuits against public participation, or SLAAPs — a motion made invalid by the companies' Massachusetts and Connecticut bases and the trial's federal district court setting, the memo argued.  The two plaintiffs also argued that Toberoff's repeated accusations of frivolous arguments and litigation misconduct by the companies' counsel, ranging from filing a supposedly retaliatory copyright action to using "scorched-earth tactics," were "unfounded" and "preposterous."

"Miller now argues that plaintiffs have misrepresented legal authority in their briefs," the filing continued. "Each of Miller's baseless accusations are belied by the actual content of plaintiffs' summary judgment briefs and the text of the authorities themselves. Miller's accusations are nothing more than an attempt to create a basis to award attorneys' fees where none exists."

The long-running trial in Connecticut's federal district court seemingly hit its climax this September, when an appeal to the Second Circuit ended in Miller being allowed to use a "termination right," which allows artists to regain rights to works they had previously signed over.  The appellate ruling largely substantiated an earlier ruling by Connecticut U.S. District Judge Stefan R. Underhill, who granted Miller a summary judgment and agreed with his argument that the production companies did not sufficiently prove that he was their employee.  The cases' implications for copyright law, termination rights, artists' obligations to producers and the "Friday the 13th" movies' future led to them being closely watched by entertainment industry observers.

Horror Inc. argued from the district court case's start that Miller had worked as a term employee and thus had no rights to his screenplay.  Despite losing that battle, they argued in the memo that there was no guarantee of attorney fees under the Copyright Act because they raised "novel questions of law" regarding Miller's rights as both a Writers Guild of America member and contractor.  They also said that the summary judgment made for a quick enough case, with limited discovery, that the fees were especially steep.  "When a case raises a "novel and unsettled question of copyright law," an award of attorney's fees on the basis of purported unreasonableness is not warranted," the companies said.  Horror Inc. and Manny Co., via their counsel from the Los Angeles law firm Greenberg Glusker Fields Claman & Machtinger LLP, seek to have the fees either thrown out or reduced to eliminate the time spent on the anti-SLAAP motion.

Reached Thursday, Toberoff said that he had not read the new opposition to his renewed fees bid.  When its claims were described to him, he reiterated his justification of the anti-SLAPP invocation, given its applicability in a California federal district court case where he helped late musician Ray Charles' children get copyrights to his songs.  He also rejected the characterization of his actions as misconduct and fees as excessive, citing a study of attorney fees from his motion that compared his to other firms' calculations.

"Their accusations are attempts at deflection," he told Law360 Pulse.  "There's no basis for it, whereas there is a basis for what we say because it's documented in a declaration, which is attached as evidence."  "Our fees were actually below the top average in [major U.S. cities," he added. "I would submit that are lower than what our opposing counsel charges."

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