Williams-Sonoma, Inc. v. Friendfinder, Inc. et al

Filing 77

MOTION for Bill of Costs Declaration of Timothy R. Cahn in Support of Plaintiff Williams-Sonoma, Inc.'s Submission for an Award of Attorney's Fee and Costs Pursuant to Court Order Dated March 4, 2008 filed by Williams-Sonoma, Inc.. (Attachments: # 1 Exhibit Exhibit A, # 2 Exhibit Exhibit B)(Chung, Megan) (Filed on 3/24/2008)

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TOWNSEND AND TOWNSEND AND CREW LLP
GREGORY S. GILCHRIST (State Bar No. 111536)
TIMOTHY R. CAHN (State Bar No. 162136)
MEGAN M. CHUNG (State Bar. No. 232044)
Two Embarcadero Center, Eighth Floor
San Francisco, California 94111-3834
Telephone: [phone]
Facsimile: [phone]
Email: [e-mail];
[e-mail];
[e-mail]
Attorneys for Plaintiff
WILLIAMS-SONOMA, INC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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WILLIAMS-SONOMA, INC., a California
corporation,

Case No. C 06-6572 JSW (MEJ)

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Plaintiff,
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v.
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ONLINE MARKETING SERVICES, LTD., et
al.,

DECLARATION OF TIMOTHY R.
CAHN IN SUPPORT OF PLAINTIFF
WILLIAMS-SONOMA, INC.'S
SUBMISSION FOR AN AWARD OF
ATTORNEY'S FEE AND COSTS
PURSUANT TO COURT ORDER
DATED MARCH 4, 2008

Defendants.
Hon. Jeffrey S. White

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DOCUMENT SUBMITTED UNDER SEAL

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DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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I, Timothy R. Cahn, declare as follows:

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1.

I am licensed to practice law in the State of California and am an attorney at the law

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firm of Townsend and Townsend and Crew LLP ("Townsend"), counsel of record for plaintiff

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Williams-Sonoma, Inc. ("WSI" or "Plaintiff") in this matter. The following facts are within my

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personal knowledge unless otherwise indicated and, if called as a witness by the Court, I would be

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competent to testify to the matters set forth below.

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2.

I prepare this declaration pursuant to the Court's March 4, 2008 Order Adopting In Part

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and Modifying In Part Report And Recommendation On Plaintiff's Motion For Default Judgment And

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Entry of Injunction ("March 4, 2008 Order") against Defaulting Defendants Online Marketing

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Services, Ltd., Unimaster, Ltd., Andrej Korchev, YetisCash, Ales Lexico, Vladimir Techl, Sweethelda

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Ballesteros, Stein Tvedt and Eddie Morgan. The Court's order held that "WSI shall recover as

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damages from the Defaulting Defendants, jointly and severally, its reasonable attorneys' fees and

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costs" and, hence, ordered WSI to "submit a supplemental submission detailing the amount of

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attorneys' fees and costs they have expended by no later than March 21, 2008." (March 4, 2008 Order,

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Dkt. No. 70, at 5.) I submit this declaration to substantiate the amount of WSI's attorneys' fees and

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costs incurred to prosecute this action against the Defaulting Defendants.

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3.

As the Townsend litigation partner with day-to-day responsibility for this matter from

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its inception, I am thoroughly familiar with this litigation and the legal services provided by

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Townsend's attorneys and legal assistants. I have been extensively involved in this matter including

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the prefiling investigation of these claims, the preparation of the Complaint and First Amended

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Complaint, preparation of the Application for Temporary Restraining Order and Order to Show Cause

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Re Preliminary Injunction, preparation of the Motion to Authorize Electronic Mail Service,

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negotiations with defendants, investigations conducted regarding the defendants' identities and

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infringing uses, preparation of case management statements, preparation of the Application for Default

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Judgment, and hearing before Magistrate Judge James.

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4.

In preparing to make this declaration, I directed an associate (Megan M. Chung) and

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legal assistant (Claude N. Mendelson) to thoroughly review and categorize all entries in the billing and

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cost records in this matter and summarize information in compliance with Civil L.R. 54-6(b).
DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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Thereafter, I reviewed their categories and summaries.

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5.

In this declaration below, I summarize the relevant billing entries and attorney and

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legal assistant time spent in connection with the identified litigation activities to substantiate WSI's

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reasonable fees and costs. The fees and costs sought by WSI include only those fees and costs

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actually charged to WSI by Townsend. If the Court desires, Townsend can make the underlying

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billing records available for the Court's in camera inspection.

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6.

As substantiated herein, the total costs and fees expended in prosecuting this action

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against Defaulting Defendants are approximately $150,000. We have made a good faith effort to

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eliminate from the total calculation any fees and costs related only to prosecution of the action against

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the other (settling) defendants, such as fees incurred in connection with settlement negotiations with

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such defendants. Despite having spent approximately $150,000, WSI seeks an award of only

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$100,000, to eliminate any doubt that the fee award is reasonable and that any fees or costs unique to

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the other defendants have been excluded.

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Overview of the Litigation

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7.

This litigation has continued for approximately 16 months. WSI filed the original

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Complaint on October 20, 2006. WSI and its counsel gathered substantial evidence establishing the

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allegations in the Complaint. Counsel examined and analyzed the evidence showing defendants' use

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of WSI's famous POTTERY BARN family of marks to promote explicit and graphic pornographic

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adult websites.

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WSI contacted the defendants and demanded that they cease from unlawfully using

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WSI's trademarks. All but two defendants ignored WSI's request. Instead, defendants continued to

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use WSI's marks and there was proliferation of additional web pages and websites that

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misappropriated WSI's marks. For these reasons and concerns that defendants would transfer their

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websites or domain names in attempt to escape liability, WSI prepared and filed an Application for a

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Temporary Restraining Order and Order to Show Cause Re Preliminary Injunction on November 3,

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2006.

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9.

Meanwhile, WSI obtained information indicating that other parties were involved in

defendants' infringing use of WSI's marks on various porn websites. Further investigations by WSI
DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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and its counsel led to the discovery of the identity of six additional entities. Consequently, on

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January 5, 2007, WSI filed a First Amended Complaint, as required under Federal Rule of Civil

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Procedure 15(a), to add six more defendants.

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10.

For both the original and amended complaints, WSI attempted to serve defendants

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several times and some as many as five times. However, in many cases and especially for the foreign

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defendants, the physical addresses provided by the defendants to the domain name registrars were

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wrong or fictitious. WSI was required to conduct additional investigation to discover accurate

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physical addresses for these defendants. Even when accurate physical addresses were discovered,

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defendants refused to accept delivery of the complaints with no explanation. In contrast to the

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incorrect physical addresses, the electronic mail addresses provided in the WHOIS database proved to

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be accurate and WSI succeeded in reaching the defendants via these electronic addresses. Because

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defendants continued to evade service upon their physical addresses, WSI prepared and filed a motion

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to authorize electronic mail service under Federal Rule of Civil Procedure 4(f)(3) on March 16, 2007.

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At the Court's request, WSI prepared and filed supplemental briefing on the service laws of nine (9)

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foreign countries. After the Court granted WSI's motion, WSI properly served all of the defendants

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with the original and amended complaints.

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11.

From the onset of this case through May 2007, counsel engaged in extensive

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negotiations and written communications with all defendants, but most notably Virtual World

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Holdings AVV, Final Whistle, Inc., Moniker Privacy Services, Inc., FriendFinder Inc., Johan

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Salmond, Dorothy Simpson, Domain Name Systems, Inc., Ford Jeske, and Umesh Chandra Rastogi

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(collectively, "Settling Defendants"). The primary objectives of these ongoing communications were

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(1) to discover information about the scope and extent of defendants' infringing activities and the

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identities of their collaborators; and (2) to explore settlement possibilities. After these extensive

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discussions, WSI was able to settle with and voluntarily dismiss the nine Settling Defendants.

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However, nine other defendants refused to settle, i.e., the Defaulting Defendants. We have deducted

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the fees incurred in connection with negotiating and settling with these defendants from WSI's

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proposed fee award.

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12.

Due to the complexities associated with numerous defendants, many of them being

DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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foreign, WSI had to submit two case management statements to update the Court on the status of the

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case. In July and September 2007, WSI prepared and filed case management statements. I also

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attended a case management conference.

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13.

Throughout this litigation, WSI engaged in extensive investigations to determine and

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gather evidence of defendants' infringing activities. WSI had to investigate to determine the correct

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identities of the defendants, who hid behind their websites and fictitious names in registering the

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domain names under a privacy filter. WSI had to investigate the scope of willful infringing use by

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defendants. Because some of the original defendants transferred domain names after the

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commencement of this action, WSI had to continually investigate to determine the owners of the

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infringing web portals and their infringing use.
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After WSI conducted these investigations to confirm whether Defaulting Defendants

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continued to willfully misappropriate WSI's marks, WSI requested an entry of default on July 6, 2007.

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After the Clerk entered default, WSI prepared and filed its motion for default judgment requesting a

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permanent injunction against the Defaulting Defendants. After the motion was referred to Magistrate

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Judge James, WSI prepared further submissions pursuant to her standing order and attended a hearing

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before Magistrate Judge James. Following the recommendation and report, WSI prepared further

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briefing of issues concerning personal jurisdiction upon the Court's request.

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Lawyer and Paralegal Qualifications and Hourly Rates
15.

The Townsend attorneys who actively litigated this matter for WSI are Timothy R.

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Cahn, Gregory S. Gilchrist, Tali L. Alban and Megan M. Chung. In addition, a legal assistant, Sana Q.

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Hamelin, assisted throughout the litigation.

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16.

I, Timothy Cahn, am a litigation partner and have been litigating commercial and

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intellectual property cases since 1991. I graduated from Harvard Law School in 1990. I have litigated

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scores of trademark infringement and counterfeiting cases, often as the lead attorney. For example, I

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was primarily responsible for successfully litigating the following matters that resulted in favorable

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published decisions: Levi Strauss & Co. v. Sunrise Int'l Trading, Inc., 51 F.3d 982 (11th Cir. 1995);

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Levi Strauss & Co. v. Shilon, 121 F.3d 1309 (9th Cir. 1997); Levi Strauss & Co. v. GTFM, Inc., 196 F.

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Supp. 2d 91 (N.D. Cal. 2002); and Emery v. Visa Int'l Service Assoc., 95 Cal. App. 4th 952 (2002) (for
DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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Visa).
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In my role as day-to-day manager, I was responsible for all aspects of preparing this

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case, including formulating strategy, drafting and editing pleadings, drafting and editing motions,

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propounding and responding to discovery requests, developing evidence, conducting legal research,

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negotiating with defendants, and also generally overseeing the work of Ms. Alban and Ms. Chung.

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My hourly billing rates during the course of this litigation have been $380.00 (2006) and $400.00

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(2007-2008).

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18.

Gregory S. Gilchrist is a litigation partner and has been litigating commercial and

intellectual property cases since 1983. He graduated from University of Michigan Law School in

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1983. His practice focuses on brand protection, and thus has litigated many trademark cases, often as

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the lead attorney.

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Mr. Gilchrist was directly involved in formulating strategy, investigating defendants,

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drafting the complaint and amended complaint, and negotiating with defendants. His hourly billing

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rates during the course of this litigation have been $440.00 (2006) and $460.00 (2007-2008).

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20.

Tali L. Alban is an associate in Townsend's San Francisco office. Ms. Alban graduated

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from the American University, Washington College of Law in 2004. Ms. Alban's practice has focused

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on intellectual property litigation, including patent and trademark litigation in the federal courts and

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before the U.S. International Trade Commission.

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Ms. Alban was directly involved in the initial stages of this litigation, including

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formulating strategy, drafting and editing pleadings, drafting and editing motions, developing

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evidence, and conducting legal research. Ms. Alban's hourly billing rate was $234.00 (2007).

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Megan M. Chung is an associate in Townsend's San Francisco office. Ms. Chung

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graduated from University of California, Davis, King Hall School of Law in 2003. After clerking for

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Judge William Alsup in 2004, Ms. Chung started litigating intellectual property cases, with an

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emphasis on patent and trademark cases.

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Ms. Chung was directly involved in the latter stages of this litigation, including drafting

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and editing the motion for default judgment and supplemental briefs in support of the motion and

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conducting legal research. Ms. Chung's hourly billing rate has been $315.00 (2007-2008).
DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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24.

Ms. Sana Q. Hamelin was a legal assistant at Townsend's San Francisco office. She

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was directly involved in this litigation, including investigating the defendants and their porn sites,

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developing evidence and assisting with pleadings and declarations. Ms. Hamelin's hourly billing rates

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have been $121.50 (2006) and $135.00 (2007).

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Calculation of Proposed Fee and Costs Award
25.

Townsend maintains comprehensive billing records for the work performed in all

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matters for its clients, including for WSI, descriptions of the work and corresponding time entries are

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entered into the billing system by the individuals performing the work at or near the time the work is

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performed. From these computer entries, hard-copy billing previews are generated and distributed to

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the attorney responsible for client billing, who conducts a review of the time entries prior to it

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becoming an invoice. During this time, some of fees are adjusted. Final invoices are generated,

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mailed to the client, and become due within thirty days of receipt. Townsend and WSI followed this

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general procedure in this matter.

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26.

To calculate the proposed fee award, I directed an associate (Megan M. Chung) and a

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legal assistant (Claude N. Mendelson) to personally review every time entry for each attorney and

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legal assistant who performed significant work on this matter. They categorized each entry (in whole

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or in part) under the litigation events described below. Where an attorney or legal assistant appeared

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only briefly in this case — i.e., made only one or two billing entries — their time has been excluded

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from the calculation altogether. I personally reviewed Ms. Chung and Mr. Mendelson's summary and

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calculations and reviewed the underlying bills.

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27.

None of the time associated with the preparation of this submission for attorney's fees

and costs is included.
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The hours claimed herein accurately and fairly reflect the work performed prosecuting

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WSI's claims. A summary of the time spent and work performed by each attorney and legal assistant

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is summarized below.

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29.

Plaintiff's total proposed fee award is $100,000. This proposed award is substantially

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less than the approximately $150,000 in fees and costs actually incurred by WSI in prosecuting the

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action against Defaulting Defendants. This substantial deduction more than accounts for any fees and
DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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costs expended that may have been unique to the settling defendants and further ensures that the

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requested amount is certainly reasonable. Indeed, as reflected in the portions of the "Report of the

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Economic Survey," attached to this declaration as Exhibit A, Plaintiff's proposed fee award compares

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reasonably and favorably with the average fees and costs reported by attorneys in trademark litigation.

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According to recent attorney-polling published in July 2007 by the American Intellectual Property

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Law Association, the median "cost" (fees and costs) charged by law firms in the San Francisco Bay

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Area for conducting trademark litigation less than $1 million at risk through the discovery stage was

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$225,000, and was $450,000 when more than $1 million was at risk. (See Exhibit A at I-94.) Median

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costs charged through conclusion of the case were $400,000 and $1 million, respectively. (See id. at

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I-94 and I-95.) Further, the median charges for large firms throughout the country (76 or more

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attorneys) for trademark litigation less than $1 million at risk were $200,000 through discovery and

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$450,000 through conclusion. (See id. at I-96.) For trademark litigation more than $1 million at risk

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were $500,000 through discovery and $1 million through conclusion. (See id. at I-96 and I-97.)

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30.

In addition, the hours expended are reasonable in view of the seriousness of defendants'

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infringing activities, the harm to WSI and consumers, WSI's vigorous attempts to stop defendants'

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unauthorized use of WSI's marks, and defendants' ongoing misconduct throughout this litigation to

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evade liability and willful infringement. In addition, that Defaulting Defendants are foreign persons

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and companies significantly added to the complexity of this action and the necessary fees expended in

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prosecuting it.

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31.

Pursuant to Local Rule 54-6, I attempted to e-mail defendants inviting them to confer

regarding the substance of this declaration.

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Detailed Description of Work Performed and Fees Incurred
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A. Prefiling investigation of defendant's infringing activities and preparing and filing
complaint and amended complaint.

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As WSI prepared to file its Complaint in federal court, Townsend investigated defendants'

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infringing activities. Much of this investigation was carried out online and reviewing public sources

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of information. Results from this preliminary investigation served as basis for the complaint filed on

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October 20, 2006. The Townsend attorneys updated relevant legal research under the Lanham Act
DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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and prepared the Complaint. The attorneys oversaw investigation regarding defendants' locations for

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the purpose of securing service of process and prepared and filed an amended complaint once the

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"Doe" defendants were identified.

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Mr. Cahn

27.2 Hours

$10,346.00

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Mr. Gilchrist

11.3 Hours

$4,972.00

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Ms. Alban

12.8 Hours

$2,995.20

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Ms. Hamelin

16.0 Hours

$1,944.00

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Subtotal (A):

67.3 Hours

$20,257.20

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B. Preparing and filing application for temporary restraining order and order to show
cause re preliminary injunction.

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WSI filed its application for temporary restraining order and order to show cause re

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preliminary injunction on November 3, 2006. Attorney and legal assistant tasks included:

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(1) researching and preparing the memorandum of law, including the foreign laws of nine countries;

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(2) preparing supporting declarations; and (3) reviewing and organizing supporting evidence.

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Mr. Cahn

46.7 Hours

$17,746.00

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Mr. Gilchrist

24.3 Hours

$10,692.00

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Ms. Hamelin

20.1 Hours

$2,442.15

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Subtotal (B):

91.1 Hours

$30,880.15

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C. Preparing and filing motion to authorize electronic service and service of amended
complaint

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WSI filed its motion to authorize electronic mail service on March 16, 2007. Attorney and

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legal assistant tasks included: (1) researching and preparing the memorandum of law; (2) preparing

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supporting declarations; and (3) reviewing and organizing supporting evidence.

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Mr. Cahn

34.4 Hours

$13,410.00

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Mr. Gilchrist

1.4 Hours

$616.00

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Ms. Hamelin

17.2 Hours

$2,216.70

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Subtotal (C):

53.0 Hours

$16,242.70

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DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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D. Further Investigation.

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Attorney and legal assistant tasks related to investigation began shortly after filing the

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Complaint and continued through most of the time the litigation has been pending. Tasks included:

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(1) overseeing the continuing work of investigators; (2) conducting extensive online research

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concerning defendants and their activities; (3) communicating with registrars and other third parties

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with relevant information; and (4) communicating with the client about the status of investigation and

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any results.

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Mr. Cahn

34.1 Hours

$13,428.00

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Mr. Gilchrist

2.7 Hours

$1,196.00

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Ms. Hamelin

27.9 Hours

$3,532.95

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Subtotal (D):

65.5 Hours

$18,156.95

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E. Preparations for case management conferences

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Attorney tasks related to case management conference began shortly after filing the Complaint

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and continued through most of the time the litigation has been pending. Tasks included: (1) preparing

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case management statements; (2) requesting continuances of case management conferences; and

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(3) appearing at the case management conferences.

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Mr. Cahn

10.2 Hours

$4,036.00

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Ms. Hamelin

.4 Hours

$54.00

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Subtotal (E):

10.6 Hours

$4,090.00

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F. Entry of default.

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WSI requested entry of default in July 2007, against all Defaulting Defendants. Attorney and

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legal assistant tasks included: (1) drafting requests for entry of default; (2) preparing supporting

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declarations; and (3) confer with the Clerk regarding entry.

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Mr. Cahn

8.9 Hours

$3,560.00

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Ms. Hamelin

9.8 Hours

$1,323.00

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Subtotal (F):

18.75 Hours

$4,883.00

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G. Preparation of default judgment motion.

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WSI moved for default judgment in September 20, 2007, against all defaulting defendants.
DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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Attorney and legal assistant tasks included: (1) researching and preparing the memorandum of law in

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support of default judgment motion; (2) preparing supporting declarations; (3) reviewing and

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organizing supporting evidence; (4) preparing proposed findings of fact and conclusions of law for

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Magistrate Judge James; (5) preparing for and attending hearing; and (6) preparing supplemental brief

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on personal jurisdiction pursuant to order.

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Mr. Cahn

74.8 Hours

$29,920.00

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Mr. Gilchrist

.4 Hours

$182.00

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Ms. Chung

59.4 Hours

$18,711.00

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Ms. Hamelin

15.4 Hours

$2,079.00

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Subtotal (G):

126.1 Hours

$50,892.00

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H. Attempts to resolve claims and voluntary dismissals.

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Since early in the case and through May 2007, Townsend attorneys were actively involved in

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attempts to resolve WSI's claims. Attorney and legal assistant tasks included: (1) negotiating directly

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with defendants; (2) preparing correspondence; (3) testing of defendants' representations in the

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negotiations; and (4) preparing voluntary dismissals where the parties were able to settle.

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Mr. Cahn

5.8 Hours

$2,204.00

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Mr. Gilchrist

1.7 Hours

$748.00

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Ms. Hamelin

3.7 Hours

$449.55

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Subtotal (H):

11.2 Hours

$3,401.55

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I. Totals:

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Mr. Cahn

242.1 Hours

$94,650.00

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Mr. Gilchrist

41.8 Hours

$18,406.00

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Ms. Chung

59.4 Hours

$18,711.00

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Ms. Alban

12.8 Hours

$2,995.20

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Ms. Hamelin

110.5 Hours

$14,041.35

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Total (A-H)

466.6 Hours

$148,803.55

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J. Costs:

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Throughout this case, Townsend attorneys have attempted to minimize costs. Bill of costs in
DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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accordance with Civil Local Rule 54 is attached as Exhibit B. The $590.00 in costs accurately and

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fairly reflect the allowable costs incurred during litigation, although actual costs were in fact much

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higher. As with the billing records for fees, Townsend can make the underlying billing records for

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costs and invoices available for the Court's in camera inspection.

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I declare under penalty of perjury under the laws of the United States of America that the
foregoing is true and correct. Executed on this 21st day of March, 2008.

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/s/ Timothy R. Cahn
TIMOTHY R. CAHN

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61315992 v1

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DECL OF TIMOTHY R. CAHN IN SUPPORT OF PLAINTIFF WILLIAMS-SONOMA,
INC.'S SUBMISSION FOR AN AWARD OF ATTORNEY'S FEE AND COSTS
Case No. C 06-6572 JSW (MEJ)

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