Fee Dispute Hotline
(312) 907-7275

Assisting with High-Stakes Attorney Fee Disputes

The NALFA

News Blog

Category: Practice Area: IP Litigation

SCOTUS Asked to Review $5M Patent Attorney Fee Award

January 18, 2022

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.

Insurer Doesn’t Need to Cover Legal Fees in Dish Copyright Suits

December 22, 2021

A recent Reuters story by Barbara Grzincic, “Insurer Off the Hook for Legal Tab in Dish’s Copyright Battles,” reports that Dish Network Corp is stuck with the legal bills it ran up defending its Hopper and commercial-skipping “AutoHop” features in a four-year copyright battle with networks ABC, CBS, Fox and NBC, a federal appeals court held in a win for Ace American Insurance Co.  The 2nd U.S. Circuit Court of Appeals said Ace had no duty to defend Dish in the litigation because its policy clearly excluded coverage for copyright violations “committed by an insured whose business is ... broadcasting,” and under the “plain and ordinary meaning” of the term, broadcasting “is precisely the nature of Dish’s business.”

Dish’s legal team at Orrick, Herrington & Sutcliffe argued that regulatory and industry sources, including the Federal Communications Commission and the Federal Communications Act, do not consider it a “broadcaster” because users must buy a subscription and use special equipment to access its content.  However, “[i]f the parties had intended ‘broadcasting’ to take on a definition assigned by the FCC or the FCA, they could have easily pointed to those sources,” Circuit Judge Denny Chin wrote, joined by Circuit Judges John Walker Jr and Pierre Leval.

Adam Stein of Cozen O'Connor, who represented Ace along with Johnathan Hacker and others at O'Melveny & Myers, praised the court for its “straightforward” opinion.  The last of the suits settled in 2016.  Although none of the settlements required Dish to pay any money, the company then sued Ace in federal court in Manhattan to recover its legal fees.  The lower court ruled for Ace in 2019, adopting the reasoning of the 10th Circuit – the only other appeals court to have considered the question. Dish said the 10th Circuit had gotten it wrong.

Judge Reduces Hourly Rates Citing Lack of Evidence

December 21, 2021

A recent Law 360 story by Nathan Hale, Judge Backs $30K in Fees for Alan Parsons’ Contempt Effort,” reports that a Florida federal magistrate recommended trimming an attorney's fee request from Grammy Award–winning music veteran Alan Parsons to just under $30,000 to cover costs he incurred obtaining a civil contempt finding against his former promoter in a trademark infringement lawsuit.

In a report and recommendation, U.S. Magistrate Judge Leslie R. Hoffman approved of most of the request filed by lawyers from three firms that worked on Parsons' claim that defendants John Regna and World Entertainment Associates of America Inc. violated a preliminary injunction in the case, but she said two out-of-state attorneys failed to support the nearly four-figure hourly rates they submitted.  "[N]o further information about these attorneys' experience or expertise is discussed, and plaintiffs submit no further evidence suggesting that the hourly rates sought for these attorneys are reasonable," she said.

Despite a lack of objection from the defense, Judge Hoffman recommended the court calculate the fees award for Jeff Goldman and Rod S. Berman of California-based Jeffer Mangels Butler & Marmaro LLP at a rate of $375 an hour — equal to what another attorney requested and what courts in the Middle District of Florida have granted in similar cases — rather than the $945 per hour and $995 per hour that they had respectively requested. 

She recommended to U.S. District Judge Roy B. Dalton Jr. that he award the full amounts of $24,030.50 requested by attorneys from O'Connell & Crispin Ackal PLLC and $5,137.50 requested by attorney Brian P. Deeb, whose fee was specifically cited by Judge Hoffman.  And she recommended the court reimburse Goldman and Berman $825 for the 2.2 hours of work they said they contributed, instead of the $2,109 they requested.

Attorney Fee Dispute in ‘Friday the 13th’ Copyright Action

December 6, 2021

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."

Judge Denies Attorney Fees After $13M IP Trial Win

December 5, 2021

A recent Law360 story by Dani Kass, “Albright Denies Atty Fees For $13M Winner in Payment IP Trial,” reports that CloudofChange LLC isn't entitled to attorney fees after winning a $13.2 million jury verdict against NCR Corp. for infringement of payment processing patents, U.S. District Judge Alan Albright has ruled.  The Western District of Texas judge rejected all of CoC's arguments that NCR's litigation conduct was "unreasonable" or otherwise exceptional, holding that NCR didn't actively ignore a notice of infringement and that disputes over discovery and testimony weren't outside the norm.

"All conducts that CoC alleges as 'unreasonable' are rather common litigation practices within the bounds of legal doctrines," Judge Albright wrote.  "The fact that the jury ... found for one party, it does not automatically mean that the losing party's litigation positions are meritless."  After a four-day trial, the jury decided in May that all asserted claims of CoC's point-of-sale patents were valid and infringed.  The jurors put a $13.2 million price tag on the damages, and CoC had hoped the judge would tack on almost $2.6 million in attorney fees and some $460,000 in expert fees.

CoC's bid for fees had faulted NCR's counsel for not conferring about a discovery issue, as requested by a law clerk, but NCR had argued that the incident happened while the company was closed and as soon as it reopened, it gathered the discovery.  Judge Albright noted that the parties worked it out without court intervention, and that overall it was a "garden-variety dispute."  The fee attempt also claimed that NCR unilaterally canceled depositions, but Judge Albright said NCR made it clear that its witness wasn't available and offered alternative dates.