WCM Industries, Inc. v. IPS Corporation et al

Filing 733

MEMORANDUM AND ORDER CONCERNING ATTORNEYS FEES, POST-JUDGMENT INTEREST, AND SUNSET PERIOD ROYALTIES. Signed by Judge Jon Phipps McCalla on 9/29/2016. (McCalla, Jon)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

WCM INDUSTRIES, INC.
Plaintiff,
v.
IPS CORPORATION
Defendant.

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No. 2:13-cv-02019-JPM-tmp
Jury Trial Demanded

MEMORANDUM AND ORDER CONCERNING
ATTORNEYS’ FEES, POST-JUDGMENT INTEREST,
AND SUNSET PERIOD ROYALTIES

This Court previously determined that Plaintiff WCM
Industries, Inc.’s (“WCM”) “is entitled to certain reasonable
attorneys’ fees based on [Defendant IPS Corporation’s (“IPS”)]
conduct with regard to providing notice of the permanent
injunction to its distributors and manufacturer’s
representatives,”

pursuant to 35 U.S.C. § 285, which entitles

the prevailing party to reasonable fees in an exceptional patent
infringement case. (ECF No. 716 at 7, PageID 40670.)
Following the Court’s determination, WCM submitted
affidavits and documentation in support of its request for
attorneys’ fees.

(ECF Nos. 723-26, PageIDs 40693-727.)

parties then submitted memoranda with respect to the
1

The

reasonableness of WCM’s requested fees; IPS objected to the
allowance of certain fees claimed by WCM.

(ECF Nos. 730-31.

PageIDs 40734, 40740.)
For the following reasons, the Court awards WCM $60,535.50
in attorneys’ fees; $27,920.43 in post-judgment interest, which
includes interest on the attorneys’ fee award; and $153,476.00
in sunset period royalties.
I. BACKGROUND
This case arises from WCM’s allegations of patent
infringement against IPS.

A jury trial was held over ten days

between October 13, 2015, and October 27, 2015. (Min. Entries,
ECF Nos. 430, 432-34, 439, 441, 444, 447, 451, 453.) On October
27, 2015, the jury returned a verdict for WCM, finding that IPS
had willfully infringed the asserted claims and that the
asserted claims were not invalid. (See Jury Verdict Form, ECF
No. 454, PageID 30935.) The Court entered a judgment on December
4, 2015. (ECF No. 478, PageID 33154.)
On May 27, 2016, WCM filed a motion for exceptional case
and award of fees. (ECF No. 602, PageID 38978.) On August 26,
2016, the Court granted WCM’s motion for exceptional case and
attorneys’ fees, finding “that IPS’s failure to clarify its
ability to communicate the notice letter and Permanent
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Injunction order to all its distributors and manufacturer’s
representatives and the delay IPS created in providing the
requisite notice is objectively unreasonable and resulted in
vexatious litigation.”

(ECF No. 716 at 11-12, PageID 40674-75.)

The Court also awarded post-judgement interest on the award of
attorneys’ fees. (Id. at 12, PageID 40675.) In that same order,
the Court ordered the parties to provide documentation for
damages, and noted that “[t]he Court will enter a final amended
judgment when all monetary damages are determinable. The final
amended judgment will include compensatory and punitive damages;
pre- and post-judgment interest; sunset period royalties; and
the limited attorneys’ fees granted by this [Court].”

(Id. at

13 n.7, PageID 40676.)
On September 6, 2016, WCM filed exhibits and declarations
in support of sunset period royalties and attorneys’ fees.

(ECF

Nos. 718, PageID 40681; 721, PageID 40689; 723-26, PageIDs
40693-727.)

On September 8, 2016, IPS responded in opposition

to WCM’s documentation and amount of attorneys’ fees, contending
the fees WCM claimed were “beyond the scope of [the Court’s]
award.” (ECF No. 730, PageID 40734.)
II. DISCUSSION
A. Attorneys’ Fees
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WCM seeks attorneys’ fees totaling $60,535.50 for work
relevant to enforcement of the Permanent Injunction, including
“preparation and filing WCM’s original and renewed motions to
enforce the Permanent Injunction and relevant briefing” (ECF No.
723, PageID 40693) and related hearings. (See ECF Nos. 723-26,
PageIDs 40693-727.)

IPS responds that portions of WCM’s request

fall outside the scope of the Court’s order and/or are not
supported by adequate documentation.

(ECF No. 730, PageID

40734.)
1. Legal Standard
Courts generally use a “lodestar” method to determine an
attorneys’ fees award.

Old Reliable Wholesale, Inc. v. Cornell

Corp., No. 5:06CV2389, 2010 WL 446199, at *5, (N.D. Ohio Feb. 2,
2010) rev’d on other grounds, 635 F.3d 539 (Fed. Cir. 2011).
The lodestar method requires the court to calculate fees by
multiplying the “hours reasonably expended” by “a reasonable
hourly rate.”

Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).

This same method applies in patent infringement suits.

See Lam,

Inc. v. Johns–Manville Corp., 718 F.2d 1056, 1068 (Fed. Cir.
1983); Comark Commc’ns., Inc. v. Harris Corp., 1998 WL 150946,
at *2 (E.D. Pa. Mar. 30, 1998), aff'd, 156 F.3d 1182 (Fed. Cir.
1998)(“The lodestar method is the proper method to use under 35
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U.S.C. § 285 and is presumed to be the reasonable fee.”).
Before the court determines the lodestar amount, the party
seeking fees bears the initial burden of establishing the hours
expended by providing detailed time records that document the
tasks completed and the amount of time spent.

See Granzeier v.

Middleton, 173 F.3d 568, 577 (6th Cir. 1999) (citing Hensley,
461 U.S. at 433).

“Where the documentation of hours is

inadequate, the district court may reduce the award
accordingly.”

Hensley, 461 U.S. at 433.

Courts in this circuit have reduced attorney fees on the
basis of insufficient billing descriptions where the attorney
did not “maintain contemporaneous records of his time or the
nature of his work,” Keener v. Dep't of the Army, 136 F.R.D.
140, 147 (M.D. Tenn. 1991), aff'd on decision of the district
court by Keener v. Dep't of the Army, No. 91–5442, 1992 WL 34580
(6th Cir. Feb. 24, 1992), and where billing records “lumped”
together time entries under one total so that it was “impossible
to determine the amount of time spent on each task.”

Cleveland

Area Bd. of Realtors v. City of Euclid, 965 F.Supp. 1017, 1021
(N.D. Ohio 1997).

See Saint-Gobain Autover USA, Inc. v. Xinyi

Glass N. Am., Inc., 707 F. Supp. 2d 737, 763 (N.D. Ohio 2010),
as corrected (Apr. 13, 2010) (finding it impossible to determine
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whether submitted amount was reasonably based on one-line,
monthly summaries provided for each attorney).
On the other hand, the Sixth Circuit Court of Appeals has
upheld an award of attorney fees and found billing records to be
adequate where entries made by counsel “were sufficient even if
the description for each entry was not explicitly detailed.”
McCombs v. Meijer, Inc., 395 F.3d 346, 360 (6th Cir. 2005).

See

Anderson v. Wilson, 357 F.Supp.2d 991, 999 (E.D. Ky. 2005)
(holding that the plaintiffs provided sufficiently detailed
billing records where counsel disclosed “itemized statements
describing the subject matter, the attorney, the time allotment,
and the charge for all work done on Plaintiffs' case”).
Therefore, “[c]ounsel need not record in great detail each
minute he or she spent on an item, [just] the general subject
matter should be identified.” Imwalle v. Reliance Med. Prods.,
515 F.3d 531, 553 (6th Cir.2008)(citations omitted)(internal
quotation marks omitted). See Hensley, 461 U.S. at 437 n.12
(“Plaintiff's counsel, of course, is not required to record in
great detail how each minute of his time was expended. But at
least counsel should identify the general subject matter of his
time expenditures.”); PPG Indus., Inc. v. Celanese Polymer
Specialties Co., 840 F.2d 1565, 1570 (Fed. Cir. 1988) (holding
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that the trial court abused its discretion in refusing to award
fees based on lack of documentation when counsel failed to keep
contemporaneous time records, but furnished affidavits and
corroborative business records).
Additionally, “a district court itself has experience in
determining what are reasonable hours and reasonable fees, and
should rely on that experience and knowledge if the
documentation is considered inadequate.”

Slimfold Mfg. Co. v.

Kinkead Indus., Inc., 932 F.2d 1453, 1459 (Fed. Cir. 1991).
Once a court determines the hours and rate, it can
calculate the lodestar amount, and then it may make adjustments
on the final award based on twelve factors:
(1) the time and labor required; (2) the
novelty and difficulty of the questions; (3)
the skill requisite to perform the legal
service properly; (4) the preclusion of
other employment by the attorney due to the
acceptance of the case; (5) the customary
fee; (6) whether the fee is fixed or
contingent; (7) time limitations imposed by
the client or the circumstances; (8) the
amount involved and the results obtained;
(9) the experience, reputation, and ability
of the attorneys; (10) the undesirability'
of the case; (11) the nature and length of
the
professional
relationship
with
the
client; (12) and awards in similar cases.
Paschal v. Flagstar Bank, FSB, 297 F.3d 431, 435 (6th Cir. 2002)

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(quoting Blanchard v. Bergeron, 489 U.S. 87, 91 n.5 (1989)).
Ultimately, however, the calculation of attorneys’ fees is left
to the discretion of the district court, and, in reaching its
conclusion, the court need not articulate its findings as to
each factor.

Nature Conservancy, Inc. v. Sims, 680 F.3d 672,

678 (6th Cir. 2012)( “This Circuit does not require that the
district court apply the Paschal factors; rather, the touchstone
for reasonableness is simply determining whether a fee ‘is one
that is adequate to attract competent counsel, but not produce
windfalls to attorneys.’” (citations omitted) (quoting Paschal,
297 F.3d at 434)).

See Healthcall of Detroit, Inc. v. State

Farm Mut. Auto. Ins. Co., 632 F.Supp.2d 676, 680 (E.D. Mich.
2009).
2. Application
a. Hours Expended
The Court finds that WCM has made “a good faith effort to
exclude from [its] fee request hours that are excessive,
redundant, or otherwise unnecessary.”

Hensley, 461 U.S. at 434.

The Court also finds that the total number of adjusted hours
billed sufficiently describe only work performed in response to
IPS’s notice of the June 3, 2016 Permanent Injunction in this
case (ECF No. 614, PageID 39205).
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See McCombs, 395 F.3d at 360.

The Court addresses each of IPS’s arguments against WCM’s
expended hours in turn.
For its first argument, IPS contends that WCM’s fees
related to third-party subpoenas fall outside the scope of the
Court’s Order because they were sent after the sunset period
elapsed and after August 9, 2016, by which time IPS claims it
already notified all required parties. 1
PageID 40734.)

(ECF No. 730 at 1,

This argument is flawed for two reasons.

First, the sunset royalty period is separate and distinct
from the award of attorneys’ fees in this case; thus, WCM is not
precluded from requesting fees accrued after the sunset period
elapsed.
Second, the Court noted that “as of August 24, 2016, it
still was not ascertainable whether every asserted distributor
and manufacturer’s representative of IPS’s had received notice
of the Permanent Injunction.”
40672.)

(ECF No. 716 at 9 n.3, PageID

Moreover, even as of August 24, 2016, IPS had not sent

WCM an “as received copy” of the third notice letter referenced
in one declaration.
ECF No. 706).)

1

(ECF No. 716 at 11, PageID 40674 (citing

Therefore, WCM’s efforts to subpoena third-

These fees amount to $7,986.00.

(ECF No. 730 at 2, PageID 40736.)

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parties to resolve IPS’s inadequate notice between August 9,
2016, to August 24, 2016, fall squarely within the scope of the
Court’s order.
For its second argument, IPS asserts that the Court should
not fully grant WCM fees where the narrative is partially
redacted, because “it is unclear how the portion relevant to the
Court’s order was calculated.”
40738.)

The Court disagrees.

(ECF No. 730 at 4, PageID
Despite WCM’s partial redactions,

the entries are “sufficient even if the description for each
entry was not explicitly detailed,” McCombs, 395 F.3d at 360,
because “the general subject matter [was] identified” and
relevant to enforcement of the Court’s order.

Imwalle, 515 F.3d

at 553.
For the above reasons, the Court finds that WCM’s submitted
sufficient documentation of its fees, which properly relate to
IPS’s conduct with regard to providing notice of the Permanent
Injunction to its distributors and manufacturer’s
representatives, and that the hours expended appropriately
reflect the work described.
b. Hourly Rate
The hourly rates claimed by counsel are also reasonable.
WCM’s rates range from $100 to $575 per hour, depending on the
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individual doing the work. (ECF Nos. 724-26, PageIDs 40696-728.)
The Court finds that these rates are commensurate with those
charged by other patent litigators across the country.

See,

e.g., Auto. Techs. Int'l, Inc. v. Siemens VDO Auto. Corp., 744
F. Supp. 2d 646 (E.D. Mich. 2010) (finding that attorney fee
awards of $695 for a partner to $190 per hour for a paralegal
were reasonable in a patent infringement case); WBIP, LLC v.
Kohler Co., No. CIV.A. 11-10374-NMG, 2014 WL 4471412, at *2 (D.
Mass. Sept. 8, 2014)(finding rates of $345 to $735 per hour for
intellectual property litigation reasonable).
Therefore, the Court finds the hourly rates submitted by
WCM reasonable.
c. Discretionary Adjustment
This Court previously considered discretionary factors in
determining the award of attorneys’ fees to WCM. (See ECF No.
716, PageID 40664.)

In doing so, it determined that this case

was exceptional as to IPS’s notice, or lack thereof, of the
Permanent Injunction.

(Id. at 12, PageID 40675.)

Consequently,

the Court adjusted WCM’s attorneys’ fees award, limiting it to
those fees related to IPS’s notice of the Permanent Injunction.
(Id.)

Moreover, the compressed window for enforcement, the

urgency of prompt resolution of the notice issues, the necessity
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of the Court hearings, and the attendant compressed preparation
schedule, further support the reasonableness of the fees sought
by WCM.
The Court finds that WCM’s submitted hours and rates are
reasonable, and that an Amended Judgment reflecting an award of
$60,535.50 in attorneys’ fees should be entered.
B. Post-Judgment Interest
In its August 26, 2016 Order regarding WCM’s motion for an
exceptional case, the Court awarded WCM attorneys’ fees related
to IPS’s notice of the Permanent Injunction, and ordered IPS to
pay post-judgment interest on such fees.

(Id.)

In determining

when post-judgment interest accrues on an attorney fee award,
the Sixth Circuit requires “the interest to run on an [sic] fee
award from the time of entry of the judgment which
unconditionally entitles the prevailing party to reasonable
attorney fees.”

Associated Gen. Contractors of Ohio, Inc. v.

Drabik, 250 F.3d 482, 495 (6th Cir. 2001).

Therefore, this

Court calculates the post-judgment interest on attorneys’ fees
from the date of its August 26, 2016 Order (ECF No. 716, PageID
40664), “which unconditionally entitles [WCM] to reasonable
attorney fees.” Drabik, 250 F.3d at 495. See Harper v. BP Expl.
& Oil, Inc., 3 F. App'x 204, 210 (6th Cir. 2001)(finding no
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abuse of discretion where district court declined to award postjudgment interest prior to the date on which it entered its
order awarding attorneys' fees).
The total post-judgment interest will be the summation of
the interest on the attorneys’ fees and the interest on the
previous money judgments.

(See ECF Nos. 595, PageID 38931; 619,

PageID 39219; 633, PageID 39296.)

According to the Court’s

calculations, IPS should be ordered to pay $27,920.43 2 in total
post-judgment interest.

The judgment will be amended

2

Pursuant to 28 U.S.C. § 1961, the Court calculated the post-judgment
interest on “any money judgment” in the case. The Sixth Circuit Court of
Appeals has held that “money judgments” include damages, pre-judgment
interest, attorneys’ fees, and costs, but has yet to determine if such
judgments include sunset period royalties or enhanced damages. See, e.g.,
Caffey v. Unum Life Ins. Co., 302 F.3d 576 (6th Cir. 2002) (affirming postjudgment interest on entire amount of judgment in ERISA case, including award
of pre-judgment interest); Drabik, 250 F.3d at 494-95. There being no
binding appellate authority, and in light of the broad language of § 1961, it
appears that the statute is applicable to both sunset period royalties and
enhanced damages.
The Court determined the post-judgment interest of the money judgments in
this case by first multiplying the accumulative money judgment amount of
compensatory damages, enhanced damages, costs, sunset period royalties, and
pre-judgment interest times the Federal Reserves Interest Rate for 1-year
Treasury Constant Maturities, as of September 27, 2016. This Annual Interest
Amount was then divided by 365 days to determine the Daily Interest Amount.
Finally, the Daily Interest Amount was multiplied by the Accumulated Days
since the Judgment on Jury Verdict, entered December 4, 2015 (ECF No. 478,
PageID 33154.). The same calculation was done with Attorneys’ Fees, using
the Attorneys’ Fees award and the Accumulated Days since the Court’s August
26, 2016 Order granting attorneys’ fees (ECF No. 716, PageID 40664). The
Court then added the accumulative money judgment post-judgment interest to
the Attorneys’ Fees Award post-judgment interest to determine the total postjudgment interest due to WCM.

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accordingly.
C. Sunset Period Royalties
In its Permanent Injunction Order, the Court ordered IPS to
pay royalties to WCM for infringing units sold during the sunset
period. (ECF No. 614 at 3, PageID 39207.)

The parties have

conferred and agree that IPS should be ordered to pay
$153,476.00 in sunset period royalties. (See ECF Nos. 720-21,
PageIDs 40686-89.)

The judgment will be amended accordingly.

III. CONCLUSION
For the above reasons, the Court awards WCM attorneys' fees
in the amount of $60,535.50, post-judgment interest in the
amount of $27,920.43, and sunset period royalties in the amount
of $153,476.00.
IT IS SO ORDERED, this 29th day of September, 2016.

/s/ Jon P. McCalla
JON P. McCALLA
UNITED STATES DISTRICT JUDGE

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