Specht et al v. Google Inc et al

Filing 333

MOTION by Counter Defendants Andoid's Dungeon Incorporated, The, Andoid's Dungeon Incorporated, The, Erich Specht, Plaintiffs Andoid's Dungeon Incorporated, The, Android Data Corporation, Erich Specht to strike MOTION by Defendant Google Inc for attorney feesMOTION by Defendant Google Inc for sanctions 314 Motion to Strike Sanctions (Murphy, Martin)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
ERICH SPECHT, an individual and doing business
as ANDROID DATA CORPORATION, and THE
ANDROID’S DUNGEON INCORPORATED,
Plaintiffs/Counter-Defendants,
v.
GOOGLE INC.,
Defendant/Counter-Plaintiff.

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Civil Action No. 09-cv-2572
Judge Harry D. Leinenweber

MARTIN MURPHY AND PLAINTIFFS MOTION TO STRIKE GOOGLE’S MOTION
FOR SANCTIONS UNDER 28 U.S.C. § 1927

NOW COME Martin Murphy, one of the attorneys for Plaintiffs, and Plaintiffs Erich
Specht, an individual and doing business as Android Data Corporation and The Android’s
Dungeon Incorporated (collectively, “Plaintiffs”), and respectfully move this Court to strike
Google’s Motion For Sanctions under 28 U.S.C § 1927 [ECF 214].
1.

Attorney fees should not be assessed lightly or without fair notice and an

opportunity for a hearing on the record. Roadway Express, Inc. v. Piper et al., 447 U.S. 752
(1980). Accordingly, should the Court decide not to strike Google’s motion in its entirety, then
Martin Murphy and Plaintiffs request that a hearing be held on the record at a time convenient to
the Court for the purposes of examining the pertinent witnesses on the record and presenting
evidence in their defense.
2.

Google’s motion is an abusive trial tactic aimed at shifting fees to counsel, forcing

Plaintiffs to give up their appeal rights, and allowing Google to claim victory by default. Google
concedes that it won’t be able to collect fees from Plaintiffs, so it is trying to saddle counsel with
the fees and coerce the attorneys to force Plaintiffs to settle.

(See, for e.g. Google’s

Memorandum at page 17: “Plaintiffs have little or no assets to satisfy the mandatory award of
costs pursuant to Rule 54(d), let alone judgment for attorney fees.” [ECF 318]).
3.

Google’s tactics are responsible in part for co-counsel withdrawing from this case

and is a complete fabrication made for an improper purpose and is sanctionable under FRCP
Rule 11 and 28 U.S.C. § 1927. Plaintiffs are asking that this Court sanction Google’s attorney,
Mr. Finn, for bringing this abusive, harassing, and fabricated motion.
4.

In addition to be being brought for an improper purpose, Google’s motion for

sanctions under 28 U.S.C. § 1927 is insufficient as a matter of law as set forth more fully below.
I.

THE COURT DOES NOT HAVE INHERENT POWER TO AWARD SECTION
1927 SANCTIONS AGAINST PARTIES IN LANHAM ACT CASES.
5.

Despite the plain reading of the statute, “Any attorney…who so multiplies the

proceedings in any case unreasonably and vexatiously may be required by the court to satisfy
personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such
conduct, Google is seeking attorney fees under § 1927 against Plaintiffs.
6.

However, [e]ight years before the fee provision [15 U.S.C. § 1117(a)] was added

to the Lanham Act, the Supreme Court held that attorneys’ fees could not be awarded in cases
under the [Lanham] Act. Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC, 626
F.3d 958, 964-965 (7th Cir. 2010). [The] reasoning is consistent with interpreting the Lanham
Act’s “exceptional case” provision as having the same substantive content as the inherent power
held inapplicable to Lanham Act Cases. Id.
7.

Thus, attorney fees may not be awarded against a plaintiff under 28 U.S.C. §

1927.
II.

Liability under § 1927 is restricted to the wrongdoer.

8.

Most of Google’s motion is directed at what it perceives as wrongful acts by the

Plaintiffs. As set forth above, attorney fees may not be awarded against a plaintiff under § 1927.
Google is asking that attorney fees be awarded against Plaintiffs as well as all of the attorneys as
a whole, but § 1927 does not operate that way. Liability under § 1927 is direct, not vicarious.
FM Industries, Inc. v. Citicorp Credit Services, Inc., 614 F.3d 335, 340-341 (7th Cir. 2010)
(citations omitted).
9.

Liability is restricted to the misbehaving lawyer and may not be transferred to his

partners, law firm [or co-counsel]. Id.
III.

Liability under Section 1927 only applies to excess costs and attorney fees.
10.

Section 1927 does not apply to all costs and fees nor does it allow fee shifting

from the parties to the attorneys. Citicorp at 340-341.
11.

It is impossible to respond to Google’s motion in that it fails to separate out fees

and costs it is seeking against Plaintiffs from costs and fees it seeks against the attorneys
12.

The motion also fails to specify exactly what amount Google is claiming as

“excess costs and fees.”
IV.

GOOGLE’S MOTION IS FRIVILOUS AND BEING PURSUED FOR AN
IMPROPER PURPOSE
13.

Should the Court consider entertaining Google’s motion for sanctions, then the

following are Martin Murphy and Plaintiffs responses to Google’s allegations:
a.

Moving for a temporary restraining order and preliminary injunction, despite admittedly

having no legal basis for either, only to later withdraw them both;
RESPONSE: Plaintiff moved for a TRO and Preliminary Injunction to preserve the
status quo and stop Google from saturating the market with ANDROID marked goods
and services. At the time the motion was filed, there were approximately 1 million

ANDROID devices sold. Today, Google activates over 350,000 devices per day or 10
million per month. On the first Court date, Plaintiff’s counsel informed the Court that
one thing that could stop Plaintiff from pursuing the TRO and preliminary injunction
would be what size bond would be required and requested the Court’s guidance on that
issue (May 7, 2009 Transcript pp. 5-6). Google’s counsel, Mr. Harris, seizing on what
Plaintiffs admitted could be a weakness, stated that:
MR HARRIS: What we are looking at, potentially, in the balance of hardship,
we are looking at somewhere between, it is estimated $400 to $650, $700 million
dollars worth of product and systems that are out there using this protocol. (Id. at
p. 11). For irreparable harm we have 18 months of watching this particular mark
rolled out, utilized, adopted, and partnered up by 47 other companies. (Id.)
Finally, with regard to a bond that would have to be filed in this case to cover
balance of hardship, so to speak, we are looking at something on the order of a
[TARP] check…(Id. at 12).
On the second court date, May 21, 2009, Plaintiff’s counsel, again, clearly stated
to the Court and Google that Plaintiff’s only concern would be what size bond the Court
would require. (May 21, 2009 Transcript at page 4). This prompted the following
exchange with Google’s counsel:
MR. HARRIS: There are millions of products out there that when you fire them
up specifically say, Powered by Android, or talk about the Android OS or
operating system, or software. (Id. p. 5)
THE COURT: What would it cost Google to change the name of the - - of
whatever it is that they are publishing? (Id. p. 9)
MR. HARRIS: I can account for equipment. The Court may recall I referred to
a check the size of a tarp installment the other day when we were last before you.
I know of equipment that bears the mark as being driven by the software in the
marketplace right now of at least approximately $500 to $600 million dollars,
hundreds of thousands of users of the software going into additional versions,
additional software, application software, that they create because it is open
source software. We are probably looking between $1.2 to $1.3 billion dollars
that is involved that would probably cost, I would imagine, $30 to $50 million
dollars minimum to address in terms of correction. Id. at pp. 9-10).

THE COURT: That would be just changing the name or would it be - -(Id. p.
10).
MR. HARRIS: Just changing the name on the equipment, respecifying new
sources, and – (Id.)
Plaintiff chose not to pursue the TRO because the Developer’s challenge had
already taken place (June 4, 2009 Transcript page 9). Plaintiff also decided to forgo the
preliminary injunction because of the large number of infringers and the size of the bond
that would be necessary. As set forth clearly in the record, the decision to withdraw the
motion was due to Google’s attorney, Mr. Harris, insisting on a billion dollar plus bond
and for the purpose of moving the case along and saving the Court and attorneys time.
(Id.)
Interestingly, though, most of Mr. Harris’ representations to the Court were
denied by Google in its answer to the Second Amended Complaint. Accordingly, Mr.
Harris should be compelled to testify at the hearing on this motion so that he can be
questioned regarding the inconsistencies between what he told the Court and what
Google is telling the Court.
b.

Demanding early depositions of Google employees, including Google’s founders and co-

chairmen, Larry Page and Sergey Brin, even though neither Mr. Page or Mr. Brin were involved
in Google’s selection or adoption of its Android trademark.
RESPONSE: According to discovery provided by Google, and the deposition of
Andy Rubin, Page and Brin were involved in the branding decision. They were two
of only eight people at the Android Naming meeting. They personally participated in
the purchasing decision. As the highest ranking officers at the meetings, in the
negotiations, and at Google, they have direct responsibility for approving the

ANDROID branding decision. Either, Mr. Page or Mr. Brin should be compelled to
testify at the hearing so that they may be questioned regarding the inconsistent
position Google is now taking.
c.

Attempting to add individual former and current Google employees as Defendants in this

action;
RESPONSE: In granting the motion to dismiss the four individuals, the Court held
that: “A plaintiff seeking to hold an officer personally liable must make a “special
showing” that the officer acted “willfully and knowingly,” such as by “personally
participat[ing] in the manufacture or sale of the infringing article (acts other than as
an officer). [ECF 113 at page 10]. At the time the Court made its ruling, Plaintiffs
only had hearsay evidence of the individuals’ participation. The extent of their real
involvement wasn’t known until discovery was almost completed. For example,
according to the Stock Purchase Agreement (“SPA”), the four individuals sold
Android to Google in their own personal capacity and received and are receiving
payments via wire transfers into their personal accounts. Also, according to the SPA,
Rubin was the only officer of Android Inc..

None of the other individuals were

officers or employees of Android, Inc.. The purchase price for Android was $71
million with $12 million up front and $59 million payable as Google achieved certain
milestones. The final milestone was due when 50 million phones were sold. The
four individuals should be compelled to testify at the hearing regarding
inconsistencies between the discovery tendered, Google’s motion, and the
representations made by them in their declarations attached to the motion to dismiss
the FAC wherein they represented that they have taken no actions in their personal

capacity. In addition, Android, Inc. was named by Plaintiffs as a party, because
Google lists it as a subsidiary of Google. The SPA also stated that Android, Inc.
would be operated as a subsidiary. However, Google apparently never set it up to
operate in that capacity. Andy Rubin should be compelled to appear to answer
questions regarding discrepancies between what he told the Court and what the
discovery actually shows.
d.

Retaining additional contingency counsel for the sole purpose of driving up the costs of

litigation;
RESPONSE:

Why would anyone suing Google want to drive up the costs of

litigation? And, more importantly, why would contingency counsel want to raise its
out of pocket costs when the only chance of getting paid is with a favorable ruling?
Obviously, Google’s counsel has the parties reversed. Google’s lawyers are getting
paid every month and have no desire to see the payday end. So they file frivolous
motions like this one to drive up litigation costs, unnecessarily burden Plaintiff’s
counsel, and attempt to drive a wedge between Plaintiffs and its counsel. Plaintiff
retained additional counsel, on the advice and desire of his counsel, for the purpose of
moving the case along not to drive up the costs of litigation. If anything, having
additional counsel saved valuable attorney time and court resources in reduced
response times and quicker discovery turnover.
e.

Refusing to handle even the simplest negotiations in good faith, such as the entry of a

protective order;
RESPONSE: Plaintiff’s counsel objected to a protective order because they
knew Google would abuse it which Google did. Google identified every single

page of e-discovery as confidential, highly confidential, and attorney eyes only
regardless of the documents content. Google produced several thousand blank
sheets of paper, its “open source” code, and screen shots from web pages – all
labeled confidential.
f.

Attempting to hide their lack of documents supporting Plaintiffs’ claims of continuous

use by producing hundreds of thousands of pages of irrelevant documents;
RESPONSE: This accusation hardly merits a response, except to say why didn’t
Google attach any of these documents to the motion and why does the number of
irrelevant documents practically exceed Plaintiff’s entire Production. According
to the Declaration of Google’s attorney, Cameron Nelson, attached to Google’s
bill of costs, Plaintiffs produced a total of 206,846 pages of documents. So is
Google alleging that none or only 6,846 pages were relevant or requested?
Obviously, Google is concerned with wasting the Court and Plaintiff’s counsel’s
time with this trumped up charge. Google should be ordered to produce these
hundreds of thousands of documents, in open Court, at its own expense, so that
the relevance of the documents in question can be explained.
g.

Refusing to provide timely and complete responses to Google’s written discovery.
RESPONSE: Anytime Google felt that it had not received a document it was
entitled to, Google filed a motion and Plaintiffs immediately complied with the
Court’s order. Google on the other hand, rarely complied with Orders of the
Court including an order to assist with obtaining the deposition of Christopher
White even though they were in contact with White’s California lawyer and even
though they claimed, at White’s deposition, that they still represented White.

Google failed to comply with the Court’s order regarding Google’s privilege log.
Google failed to inform Plaintiffs that many of the witnesses on Google’s witness
list were no longer employed by Google and may not be represented by them
including: Linda Tong, Sung Hu Kim, Rich Miner, Tom Moss, and Erick Tseng.
h.

Withholding documents until after all depositions were completed and fact discovery was

set to close.
RESPONSE: Most of the documents that were produced at the end of discovery
were documents related to Google’s infringement and not Plaintiffs use. They
were documents that Google should have, but didn’t provide.
i.

Pursuing various irrelevant third party depositions and subpoenas;
RESPONSE: Google’s attorneys interfered with virtually every third party
citation. Google inadvertently provided Plaintiffs counsel with an un-redacted
copy of its July invoice to Google. The invoice provides irrefutable evidence that
Google’ attorneys were orchestrating third party responses to Plaintiffs discovery
requests including the deposition of White.

Google’s attorneys also filed

frivolous motions to compel Plaintiffs attorneys to produce documents it already
had wasting valuable attorney and court resources. Google should be compelled
to produce all of its invoice detail to Plaintiffs attorneys in advance of the hearing
so that they may be thoroughly questioned regarding this allegation.
j.

Attempting to extend the close of discovery for no other purpose but to forestall Google’s

motion for summary judgment.

RESPONSE: The motion to stay discovery pending resolution of the Mandamus
Petition was aimed at avoiding duplicative depositions not to forestall Google’s
motion.
i.

Attempting to add Defendants (both new and formerly dismissed) on the eve of the close

of discovery in order to stall Google’s motion for summary judgment
RESPONSE: Google readily admits: “As such, the only companies that have
actually used the ANDROID mark in commerce are Google and a handful of
phone manufacturers and mobile service providers that sell phones which run
Google’s Android software.” (Google’s Memorandum at page 18) [ECF 318].
The original and First Amended Complaint’s sought to join all the parties that
created and encouraged the use of Android, the OHA members as opposed to
those that actually sold infringing products. After the Court dismissed all of the
OHA members except Google, Plaintiffs made a decision to only join those
parties that were actually using ANDROID in commerce. This could not be
readily ascertained until discovery was completed. It was also subject to revision
as more carriers began selling ANDROID products such as AT&T which did not
begin selling products until April, 2010. The purpose of adding parties was to
preserve resources of the attorneys and the Court. Adding new parties would not
have forestalled Google’s motion since the Court already ruled that Google could
file its motion on July 30, 2010. Also, since Google had agreed to represent all of
the parties, there wouldn’t be any need for new counsel to get familiar with the
case. Again, Google’s invoices would shed light into Google’s attorneys’ real

motives. For example, the July invoice shows that Google needed to create a
story to explain facts it had misrepresented to the Court.
j.

Attempting, without basis, to disqualify Judge Leinenweber in order to stall Google’s

motion for summary judgment.
RESPONSE: Despite the fact that this is a loaded accusation, Google is wrong.
As alleged by Google above, AT&T is only one of a handful of phone
manufacturers and mobile service providers that sell phones which run Google’s
Android software. As such, AT&T and, therefore, its shareholders, profit directly
from the sale of ANDROID products. What is not clear, if Plaintiffs should
prevail on its appeal, is whether Google will pay any past or future licensing fees
due Plaintiffs as a result of AT&T’s use of the ANDROID mark. Certainly to an
outsider, it could appear that an AT&T shareholder could have a financial interest
in the outcome of this case. The Court also denied Plaintiffs’ motion for recusal,
based upon Google’s attorneys’ representation regarding an indemnity agreement.
However, according to Google’s invoice and AT&T’s response to the Appellate
Court, the indemnity agreement was a fiction concocted by Google’s counsel to
influence the Court’s decision. Thus, it cannot be said that Plaintiffs concerns
were without basis. Again Google’s counsel, Mr. Harris and Mr. Nelson, should
be compelled to explain the inconsistencies between what was told to the Court
and what the documents show.
k.

Plaintiffs sued the 47 OHA members to create nuisance value.
RESPONSE: The original complaint named the 47 OHA partners, including
Google, and the OHA partnership. It is common practice that a lawsuit may be

commenced against a partnership and its partners. General partners are jointly
and severally liable for the acts of a partnership. Since the OHA is not a limited
partnership, it is a general partnership. Thus, all of the partners are liable for the
actions of the partnership and their partners. The Court dismissed the OHA
because Rubin’s misrepresented what the OHA was in his Declaration attached to
Google’s motion to dismiss the FAC.

However, throughout the discovery,

including Rubin’s deposition, it is clear that the OHA is a partnership and the
OHA members are Google’s “Partners.” Together, the partners created Android
and the partners share in the rewards. There was no advantage to Plaintiffs in
naming 47 defendants. They were all named to avoid finger pointing. When the
Court announced that Google would be responsible for everyone, it made things
much less complicated and Plaintiffs concentrated on those parties selling or
distributing Android as opposed to those creating and packaging Android goods
for sale.
Wherefore, Plaintiffs and Martin Murphy, move this Honorable Court for an Order
striking Google’s Section 1927 sanction petition. If the Court denies, the motion to strike, then
Martin Murphy and Plaintiffs, ask that the Court conduct a hearing on the record; order Google’s
attorneys to produce all of its complete un-redacted invoices to Plaintiffs’ attorney; and compel
the attendance of Larry Page or Sergey Brin, Andy Rubin, and Google’s attorneys, Herbert Finn,
Richard Harris, Jeffrey Dunning and Cameron Nelson to attend the hearing and be questioned on
the record regarding the allegations in Google’s motion; and an Order granting Plaintiffs such
other and further relief as is appropriate under the circumstances including the fees associated
with responding to this motion.

Respectfully submitted,
ERICH SPECHT, an individual and doing
business as ANDROID DATA
CORPORATION, and THE ANDROID’S
DUNGEON INCORPORATED
By:

/s/Martin J. Murphy

Martin J Murphy
2811 RFD
Long Grove, IL 60047
[phone]
[e-mail]

CERTIFICATE OF SERVICE
Martin J. Murphy, an attorney, certifies that he caused copies of the foregoing to be
served by electronically filing the document with the Clerk of Court using the ECF system this
_26th__ day of April, 2011.

/s/ Martin J. Murphy