A recent Law 360 story by Dani Kass, “Special Master Blasts Cisco’s $4M Fee Bid, Oks Apple’s $2M,” reports that a special master appointed by U.S. District Judge William Alsup lectured Cisco for not backing up its massive $3.8 million attorney fee request with documentation after beating Straight Path IP Group's infringement litigation, but said the more meticulous Apple deserved most its requested $2.4 million.  Despite the upbraiding, BraunHagey & Borden LLP partner Matthew Borden still recommended that Baker Botts LLP- and Desmarais LLP-backed Cisco Systems Inc. get $1.9 million — half of its initial request.  Pending Judge Alsup's approval, Hogan Lovells-backed Apple Inc. would get $2.3 million, with the possibility for more.

Apple and Cisco had won the case accusing them of infringing Straight Path's internet telephone patents on summary judgment.  Judge Alsup declared the case exceptional since Straight Path's infringement claims contradicted a position it had advocated at the Federal Circuit in appealing a Patent Trial and Appeal Board decision.

But he was furious when Apple and Cisco requested a combined $10 million in fees over the summer, accusing them of overstating costs. He appointed Borden to determine a reasonable amount of fees.  The special master said Cisco failed to provide documents requested by the court to support its fee request.  He also said the alternative methods for fees proposed by Cisco didn't provide "a meaningful check against overbilling."

"Apple followed the court's order and therefore provided transparency into what it was billing for, and how much it charged," Borden wrote.  "The two lawsuits involved substantially similar claims and defenses.  The main difference is that plaintiff sought $41 million in hard damages from Cisco, which is less than half of what it sought from Apple.  Yet Cisco has demanded over $1.5 million more in fees than Apple ... Cisco has not carried its burden of proving that it is entitled to the amount it claims."

Overall, the special master said Cisco didn't provide records that described which attorneys were working on the case and what they did, in chronological order.  He also raised questions about when Desmarais took over the case from Baker Botts, as well as how to parse the current litigation from a flat-fee agreement.  Under that agreement, Cisco paid a monthly fee for all dealings between the firm and the company, including inter partes review proceedings that were explicitly excluded from the current fee award, according to the report.  Cisco did provide an estimate of how much of that monthly fee was related to the litigation, but didn't explain how it was decided, Borden said.

The special master noted that there was no precedent to dictate whether alternative fee arrangements like Cisco's are eligible for attorney fees, but recommended that they should be.  Cisco had suggested comparing its fees to those in other patent cases, but Borden said "every case is unique" so it's hard to create such a calculation.  The only true comparison is Apple's case, which asks for far less than Cisco, he said.  "In the absence of better information, an award of 50% of Cisco's documented flat fees is recommended," the report states.

Apple had lowered its original request from $3.9 million to $2.4 million, which Borden suggested be trimmed in areas where there were inconsistencies or less-detailed record-keeping.  But overall, he said Apple's time spent on the case and rates charged were reasonable, and that most of its work stemmed from having to defend against claims that never should have been brought.

"Had plaintiff not elected to pursue its exceptional claims, Apple would not have incurred these fees," the report and recommendation states.  Borden added that the exceptional conduct starts in June 2016, when Straight Path started pursuing the contrary infringement theory.  Apple may also be able to get additional appellate fees, but it first has to get permission from the court to file an untimely application, Borden said.