Pact XPP Technologies, AG v. Xilinx, Inc., et al

Filing 448

MEMORANDUM ORDER granting 401 Motion for Attorney's Fees. Signed by Magistrate Judge Roy S. Payne on 8/3/2013. (rsp1)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
PACT XPP TECHNOLOGIES, AG
v.
XILINX, INC., et al.

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Case No. 2:07-CV-563-RSP

MEMORANDUM ORDER
Before the Court is PACT XPP Technologies, AG’s Motion for Attorney’s Fees (Dkt.
No. 401, filed June 27, 2012). The jury found that Xilinx willfully infringed claims 1, 3, 17, and
30 of U.S. Patent No. 6,119,181, and claim 8 of U.S. Patent No. 6,338,108. (Verdict, Dkt. No.
370.) The jury awarded $15,399,900 as a reasonable royalty. (Id.) The Court has denied
Xilinx’s Renewed Motion for Judgment as a Matter of Law of No-Willfulness, and in the
Alternative, for a New Trial. (See Mem. Order, Dkt. No. 442.) The Court has also granted
PACT’s Motion for Enhanced Damages. (See Mem. Order, Dkt. No. 443.)
APPLICABLE LAW
In patent infringement actions, “[t]he court in exceptional cases may award reasonable
attorney fees to the prevailing party.” 35 U.S.C. § 285. As the Federal Circuit has noted,
“[d]istrict courts have tended to award attorney fees when willful infringement has been proven,
and this court has uniformly upheld such awards.” S.C. Johnson & Son, Inc. v. Carter-Wallace,
Inc., 781 F.2d 198, 200 (Fed. Cir. 1986). In fact, the Court held that it was incumbent upon the
district court to “explain why this is not an exceptional case in the face of its express finding of
willful infringement.” Id. at 201. The burden is on PACT to establish the exceptional nature of
this case by clear and convincing evidence, which is also the standard of proof for willfulness.
In this case, the jury expressly found that the infringement by Xilinx was willful. Furthermore,

the Court found, as set forth in the August 30, 2013 Memorandum Order (Dkt. No. 443 at 7)
awarding enhanced damages, that “Xilinx carried out a knowing and calculated plan to acquire
PACT’s patented technology without compensation.” That finding was also supported by clear
and convincing evidence. The Court concludes that this finding of fact, together with the jury’s
finding of willful infringement, render this an exceptional case within the meaning of § 285.
Even after a case has been found to be exceptional, the court must make the equitable
determination whether attorney’s fees are appropriate. MEMC Electronic Materials, Inc. v.
Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1382 (Fed. Cir. 2005). In deciding the
appropriateness of awarding fees, the court considers “the degree of culpability of the infringer,
the closeness of the question, litigation behavior, and any other factors whereby fee shifting may
serve as an instrument of justice.” Juicy Whip, Inc. v. Orange Bang, Inc., 382 F.3d 1367, 1373
(Fed. Cir. 2004). The same analysis that supports the award of enhanced damages and the
finding of exceptionality in this case also supports the award of attorney’s fees.
Xilinx raises two other issues concerning the propriety of any award of fees. First, it
contends that PACT is not a “prevailing party” within the meaning of § 285 because PACT
started its case asserting 11 patents and ultimately took just two to trial. However, Xilinx
requested that the Court limit the number of asserted patents and claims in order to make this
case more manageable. In response, PACT simply decided to limit its case to the strongest
claims in to avoid a Court-ordered limitation on the number of asserted claims, and in view of
court-imposed limitations on discovery, claim construction and trial time. The other 9 patents
were not found uninfringed or invalid. PACT prevailed on all of the claims and defenses that
were actually presented to the jury. There can be no reasonable argument that PACT is not the
prevailing party.

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Second, Xilinx contends that PACT has not presented the Court with sufficient
documentation to support its fee request. The Federal Circuit made clear in ClearValue, Inc. v.
Pearl River Polymers, Inc., 560 F.3d 1291, 1305 (Fed. Cir. 2009), that there is no set format in
which a prevailing party must present its evidence of attorney’s fees. By relying upon Wegner v.
Standard Insurance Co., 129 F.3d 814, 822 (5th Cir. 1997), the Court implicitly approved
making an award based on a “six-line spreadsheet, indicating only the hours, rate, and fees
incurred by each attorney” with no description of individual tasks. The documentation filed by
PACT surpasses this standard, but the Court chose to delve further. Both of the law firms
requesting fees have submitted to the Court for in camera review the detailed billing records
supporting the summaries presented with their motion. A review of those records by the Court
shows that the summaries are properly supported, the work was reasonably related to the issues
in the case, and does not appear to be excessive.
CALCULATION OF AN APPROPRIATE FEE
PACT has requested an award of $2,403,874.83, which it represents is 37.5% of the fees
incurred, and is calculated as follows. The case was divided into three temporal phases based on
the maximum number of patents at issue during each phase. The first phase was from filing
through June 24, 2011, when as many as 11 patents were asserted. Because PACT ultimately
prevailed on only the two patents asserted at trial, it limited its fee request to 2/11ths (18.2%) of
the fees incurred during this phase. The second phase was from June 25, 2011 through April 15,
2012 when no more than 7 patents were at issue. Thus it sought only 2/7ths (28.6%) of the fees
incurred during this second phase. Finally, the last phase ran from April 16, 2012 through May
31, 2012 when PACT had limited the case to the two patents asserted at trial. For this last phase,
PACT requested 2/2ds (100%) of the fees incurred. This method covers the hours component of
the lodestar calculation.
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With respect to the hourly rate component of the lodestar, PACT listed the average
hourly rate charged by each of the attorneys for whose services fees are sought for each separate
phase. The reasonableness of these rates were cross-checked against the Report of the Economic
Survey for 2011 published by the American Intellectual Property Law Association, which shows
an average hourly rate for both associates and partners practicing in the intellectual property field
in Texas. Xilinx points out that PACT is seeking rates that exceed the 75th percentile for three of
the lawyers for whom fees are sought. (Dkt. No. 408 at 13).

PACT responds that reducing

these hourly rates to the 75th percentile would cause a 5% reduction in the fee request. (Dkt. No.
413 at 5). Xilinx agrees with that calculation. (Dkt. No. 423 at 5). The Court agrees with Xilinx
that there is insufficient justification for an award at a rate in excess of the 75th percentile.
Accordingly, the fees awarded will be reduced by 5% on this basis.
The Court finds that the number of hours sought by PACT is conservative, perhaps more
so than the Court would have been inclined to award otherwise. The discount of the requested
fees based on the number of patents asserted at any given time likely underestimates the time
spent on the patents that were ultimately presented to the jury, since it is very likely that
throughout each phase of the case more time was spent on the strongest claims. The two patents
that were successfully presented to the jury were the strongest of the claims. Additionally, the
fee request does not include the services of local counsel, who were observed by the Court to
have rendered substantial services. Accordingly, the Court will accept the hours sought by
PACT.

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CONCLUSION
After considering all of the evidence and the parties’ arguments, the Court finds that
attorney’s fees in the amount of $2,283,681 are appropriate and will be included in the Judgment.
SIGNED this 3rd day of January, 2012.
SIGNED this 3rd day of September, 2013.

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ROY S. PAYNE
UNITED STATES MAGISTRATE JUDGE

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