Beneficial Innovations, Inc. v. Advance Publications, Inc. et al

Filing 635

MEMORANDUM OPINION AND ORDER. Signed by Judge Rodney Gilstrap on 8/26/2014. (ch, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION

GOOGLE INC.,
Plaintiff,
v.
BENEFICIAL INNOVATIONS, INC.,
Defendant.

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§ Civil Action No. 2:11-cv-00229-JRG-RSP
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MEMORANDUM OPINION AND ORDER
Before the Court is Third-Party Plaintiff Google Inc.’s (“Google”) Motion for Attorneys’
Fees, Costs and Expenses and Motion for Entry of Judgment. (Dkt. Nos. 537, 540.) Having
considered

the

parties’

written

submissions,

the

Court

GRANTS-IN-PART

and

DENIES-IN-PART Google’s Motion for Attorneys’ Fees, Costs and Expenses, and
GRANTS-IN-PART and DENIES-IN-PART Google’s Motion for Entry of Judgment.
I.

BACKGROUND
This is a breach of contract case arising from a Settlement Agreement that Google and

Beneficial Innovations, Inc. (“Beneficial”) entered into in 2010 (“Settlement Agreement”).
Google claims, among other things, that Beneficial breached the Settlement Agreement by
bringing a lawsuit against certain Google customers (the “Accused Google Customers”) for
infringing United States Patent Nos. 6, 712,702 (the “’702 Patent”) and 7,496,943 (the “’943
Patent”) based on their use of Google’s DoubleClick product.
On January 23, 2014, after a three day jury trial, a jury reached a verdict regarding
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Google’s breach of contract claim. (See Dkt. No. 514.) The jury found that (1) Beneficial
breached the prior Settlement Agreement between Beneficial and Google by bringing a lawsuit
against the Accused Google Customers for infringement of the ’702 and ’943 Patents based on
these customers’ use of Google’s DoubleClick product; and (2) Google is entitled to recover
nominal damages in the amount of one dollar. (Id.) On August 22, 2014, the Court denied
Beneficial’s motion for judgment as a matter of law in its entirety. (See Dkt. No. 634.)
Google now seeks to recover attorneys’ fees and all other reasonable costs and expenses
under the Settlement Agreement. (See Dkt. No. 537.) Google also moves for an entry of
judgment against Beneficial, including a declaratory judgment. (See Dkt. No. 540.)
II.

GOOGLE’S MOTION FOR ATTORNEYS’ FEES
The Settlement Agreement between Google and Beneficial contains a prevailing-party

attorneys’ fees clause as follows:
The prevailing party in any action or proceeding alleging breach of this agreement shall be
entitled to recover from the Party who breaches the Agreement, not only the amount of any
judgment or order, but also such other costs and expenses as may be reasonably incurred by
said Party, including court costs and reasonable attorney fees and all other reasonable
cost[s] and expenses, whether taxed or otherwise, incurred in connection with said action
or proceeding. Such additional recovery, provided for in this Section, will be contingent
upon a finding of the Court that the recovering Party was the prevailing Party in the action
and that the breach giving rise to the recovery was a material breach of this Agreement.
(PTX 1, Settlement Agreement, § VIII.)
According to such clause, a party to the Settlement Agreement may recover attorneys’ fees and
other reasonable costs provided that (1) the recovering party is the prevailing party in an action
alleging breach of the Settlement Agreement; and (2) the breach giving rise to the recovery was a
material breach of the agreement.
Here, Beneficial does not dispute that, pursuant to the jury verdict, the breach giving rise to
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Google’s claim for attorneys’ fees was a material breach of the Settlement Agreement. Beneficial
does contend, however, that Google is not the prevailing party in this case. The Settlement
Agreement expressly provides, and the parties agree, that it should be construed and controlled by
California law. (See id.)
A.

Legal Standard
California Civil Code § 1717(a) permits an award of attorneys’ fees to the prevailing party

in a breach of contract action. It provides:
In any action on a contract, where the contract specifically provides that attorney’s fees and
costs, which are incurred to enforce that contract, shall be awarded either to one of the
parties or to the prevailing party, then the party who is determined to be the party
prevailing on the contract, whether he or she is the party specified in the contract or not,
shall be entitled to reasonable attorney’s fees in addition to other costs.
Cal. Civ. Code § 1717.
When a party obtains a “simple, unqualified win” by “completely prevailing on, or defeating, the
contract claims in the action,” and the contract contains a provision for attorneys’ fees, the
successful party is entitled to attorneys’ fees “as a matter of right,” eliminating the trial court’s
discretion to deny fees under § 1717. Hsu v. Abbara, 9 Cal. 4th 863, 875-76 (1995); Silver Creek,
LLC v. BlackRock Realty Advisors, Inc., 173 Cal. App. 4th 1533, 1538 (Cal. Ct. App. 2009). “If
neither party achieves a complete victory on all the contract claims, it is within the discretion of the
trial court to determine which party prevailed on the contract or whether, on balance, neither party
prevailed sufficiently to justify an award of attorney fees.” Scott Co. of California v. Blount, Inc.,
20 Cal. 4th 1103 (1999). “Because the statute allows such discretion, it must be presumed the
trial court has also been empowered to identify the party obtaining a greater relief by examining
the results of the action in relative terms: the general term ‘greater’ includes ‘larger in size than

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others of the same kind’ as well as ‘principal’ and ‘superior in quality.’” Silver Creek, 173 Cal.
App. 4th at 1538 (citations omitted).
In deciding whether there is a “party prevailing on the contract,” the trial court is to
“compare the relief awarded on the contract claim or claims with the parties’ demands on those
same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening
statements, and similar sources.” Hsu, 9 Cal. 4th at 876. Further, “in determining litigation
success, courts should respect substance rather than form, and to this extent should be guided by
equitable considerations.” Id. at 877 (internal quotations omitted).
B.

Analysis
a.

Google is the prevailing party because it has obtained a greater relief on the
contract

Google was not an original party but intervened in this case on behalf of the Accused
Google Customers, who were sued by Beneficial for allegedly infringing the ’702 and ’943
Patents. In its Complaint for Intervention, Google answered Beneficial’s infringement claims
against the Accused Google Customers, raising, among other things, “license” and “exhaustion” as
affirmative defenses. (See Complaint for Intervention, Dkt. No. 193 at 7-8.) In addition, Google
asserted a single breach of contract counterclaim against Beneficial based on the Settlement
Agreement. (Id. at 9.) Google sought the following relief in its counterclaim:
(i) that Beneficial recover nothing and that its complaint be dismissed with prejudice;
(ii) that the Court deny any injunctive relief in favor of Beneficial and against Google or
the Accused Google Partners;
(iii) that the Court find that Google and the Accused Google Partners do not infringe the
’702 and ’943 patents because of a license;
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(iv) that the Court find that Beneficial materially breached the terms of the Settlement
Agreement granting a license to Google and the Accused Google Partners;
(v) awarding Google and the Accused Google Partners costs, fees, and expenses incurred
by Google and the Accused Google Partners in enforcing the Settlement Agreement
including the damages resulting from enforcing the Settlement Agreement.
(Id. at 14-15 (emphasis added).) After Google intervened, all the Accused Google Customers
settled with Beneficial, and Beneficial’s patent infringement claims against those customers were
dismissed with prejudice. (See, e.g., Dkt. No. 358, Order of Dismissal.) Google nonetheless
proceeded to trial with its breach of contract counterclaim, where it obtained a jury finding of
breach against Beneficial and was awarded one dollar as nominal damages.
To determine whether Google is the prevailing party, this Court needs to compare the relief
awarded as to Google’s breach of contract claim with the relief which Google demanded on the
same claim and its “litigation objectives as disclosed by the pleadings, trial briefs, opening
statements, and similar sources.” See Hsu, 9 Cal. 4th at 876. The scope of Google’s requested
relief, however, has not remained consistent throughout this litigation. While Google’s complaint
appears to focus on relief pertaining only to the Accused Google Customers, but as the settlement
and dismissal of those parties accelerated, Google began advocating for a much broader relief.
(See Complaint for Intervention at 14 (“(iii) that the Court finds that Google and the Accused
Google Partners do not infringe the ’702 and ’943 patents because of a license”; “(iv) that the
Court finds that Beneficial materially breached the terms of the Settlement Agreement granting a
license to Google and the Accused Google Partners.”) (emphasis added).) For example, Google
contended in its trial brief that the license it had obtained under the Settlement Agreement

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“exhausted Beneficial’s rights to assert its patent against any of Google’s customers” using
Google’s advertising products and serves. (See Dkt. No. 488 at 3.) As such, Google sought a
broad declaratory relief “not limited to its sales of advertising products and services to the Accused
Google Partners.”1 (See id.; see also Dkt. No. 445, Joint Final Pretrial Order at 8 (“Google also
seeks a declaratory relief that its customers are licensed under the Settlement Agreement.”))
Furthermore, in its Complaint for Intervention, Google asserted patent exhaustion solely as an
affirmative defense to Beneficial’s infringement claims against the Accused Google Customers,
and not as some independent issue which could survive to dismissal of those customers. (See
Complaint for Intervention at 2, 7-8.) As the litigation progressed toward trial, however, Google
began arguing that patent exhaustion was also one of the bases for Google’s breach of contract
claim. (See Dkt. No. 488 at 2.) Google’s changing position throughout the course of this
litigation makes it more difficult to assess its true litigation objective. However, for purposes of
determining whether Google is the prevailing party, the Court will take Google’s request for relief
“at [its] most exuberant.” De La Cuesta v. Benham, 193 Cal. App. 4th 1287, 1296 (Cal. Ct. App.
2011). Specifically, the Court finds that Google has demanded the following relief on its breach
of contract claim: (1) a finding that Beneficial breached the Settlement Agreement by bringing the
instant case against the Accused Google Customers, and an award of one dollar in nominal
damages; (2) an award of attorneys’ fees and reasonable costs in enforcing the Settlement
Agreement against Beneficial; and (3) a declaratory relief that all Google customers everywhere
are licensed under the Settlement Agreement “by operation of patent exhaustion law.”
It is undisputed that Google succeeded on its first request for relief. The jury clearly
found that “Beneficial breach[ed] the Settlement Agreement between Beneficial and Google by
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Google never sought to amend its complaint by incorporating such request for a broad declaratory relief.

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bringing a lawsuit against the Accused Google Customers for infringement of the ’702 and ’943
patents based on their use of Google’s DoubleClick product.” (Dkt. No. 514, Jury Verdict at 1.)
When asked whether Google was entitled to recover nominal damages in the amount of one dollar,
the jury answered “YES.” (Id. at 2.)
Beneficial asserts that it has prevailed on Google’s second request for relief, i.e., attorneys’
fees and costs, because the Court rejected Google’s argument that such damages constitute general
damages, and precluded Google’s expert from testifying to such matter at trial. (See Dkt. No.
483, Order on Motions in Limine at 1-2.) However, the fact that the Court precluded Google from
presenting its fee request directly to the jury during trial does not determine which party prevailed
on this claim. The Court precluded Google’s claim for attorneys’ fees partly out of concern that
the attorneys’ fees “will continue to accrue through the trial,” and to avoid adjudicating the fee
issue in a piece-meal fashion. (Id. at 2.) The Court did not foreclose the possibility that Google
may recover such fees by post-trial motions. Therefore, Beneficial did not “prevail on” Google’s
claim for attorneys’ fees and costs. Indeed, prior to the Court issuing this instant order, neither
party has prevailed on such claim.
Finally, Beneficial contends that it has prevailed on Google’s exhaustion claim, citing the
Court’s order dismissing the issue of patent exhaustion from this case. (See Dkt. No. 497.)
There, the Court found that, because Beneficial had dismissed with prejudice all infringement
claims against all the named Accused Google Customers, that patent exhaustion – presented by
Google as an affirmative defense to such claims – was no longer a live, justiciable issue. (See id.
at 2-3.) Additionally, the Court rejected Google’s invitation to read patent exhaustion into the
contract dispute. (See id. at 3-7.)

The Court specifically noted that patent exhaustion or

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language describing the same was never part of the Settlement Agreement. Given that the
agreement “completely and unambiguously” defined the scope of Google customers’ license, the
Court concluded that it was improper for it to alter the express terms of the license, or rewrite the
contract, by unilaterally inserting an implied license under the patent exhaustion doctrine. The
Court, however, made it clear that its ruling does not impede a different Google customer’s right to
raise exhaustion as an affirmative defense should Beneficial sue that customer for patent
infringement in the future. (Id. at 6.) “Nor does [the ruling] prevent Google from filing a
declaratory judgment action, in a venue of its choosing, seeking a judicial declaration that
Beneficial’s patent right has been exhausted with respect to certain of Google’s products.” (Id. at
6-7.)
The Court disagrees with Beneficial that its prior order in preparation for trial on the
contract claim makes Beneficial the “prevailing party” on the exhaustion issue. A determination
of the prevailing party must await the “final resolution” of the relevant claims. In re Estate of
Drummond, 149 Cal. App. 4th 46, 51 (Cal. Ct. App. 2007) (citing Hsu, 9 Cal. 4th at 876).
“Final”, however, does not mean “final for purposes of a particular lawsuit.” Id. Status as the
“party prevailing on the contract” is ascertained “not by technicalities of pleading and procedure
but by a pragmatic assessment of the parties’ ultimate positions vis a vis their litigation
objectives[.]” Id. (emphasis added). If a party obtains only “an interim victory,” based, for
example, on another party’s attempt to pursue his claims in the wrong forum, such does not
support a finding of prevailing party under § 1717. Id. at 51-52; see also Bautista v. Park W.
Gallery, 388 F. App’x 635, 636-37 (9th Cir. 2010) (same).
Here, the Court rejected Google’s attempt to transform its affirmative defense of patent

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exhaustion into one of the bases for its breach of contract claim. As a result, Google did not
obtain the broad declaratory relief it had sought on behalf all customers everywhere using
Google’s advertisement products and services. However, this scenario does not constitute a
“final resolution” on the exhaustion issue, as Google may yet seek the same relief based on
exhaustion as an independent action in “a forum of its choosing.” See Drummond, 149 Cal. App.
4th at 51; Dkt. No. 497 at 6-7. Beneficial only obtained an “interim victory” by successfully
excluding the exhaustion issue from this case. An attempt to determine prevailing party status as
to the exhaustion issue is premature, and must await a future ruling that clarifies the parties’
“ultimate positions.” Drummond, 149 Cal. App. 4th at 51. Accordingly, as relates to the instant
case, neither Google nor Beneficial prevails on the exhaustion issue.
In summary, Google requested three specific types of relief. It clearly succeeded with its
first request by obtaining a favorable jury verdict as to breach of contract. Beneficial did not
prevail on Google’s claim for attorneys’ fees and costs because the Court allowed Google to seek
such fees by post-trial motions. Neither Beneficial nor Google prevailed on the issue of patent
exhaustion. While Beneficial might argue that this result falls short of a “complete victory” for
Google, Google undoubtedly is the party who has obtained “a greater relief” in this litigation. See
De La Cuesta, 193 Cal. App. 4th at 1294-95. Therefore, the Court finds that Google is “the party
prevailing on the contract” and accordingly finds that Google is entitled to recover reasonable
attorneys’ fees in addition to other costs. Cal. Civ. Code § 1717(a); Silver Creek, 173 Cal. App.
4th at 1538.
b.

The attorneys’ fees requested by Google are reasonable

Beneficial next complains that the attorneys’ fees requested by Google are unreasonable.

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Specifically, Beneficial contends that (1) the Court should apportion the fees between Google’s
affirmative claim for breach of contract and the affirmative defense of exhaustion; and (2) the
hourly rates sought by Google’s trial counsel are unreasonable. The Court will address each of
Beneficial’s arguments in turn.
Beneficial urges the Court to apportion Google’s requested fees between the fees incurred
as to the breach of contract claim and those incurred as to the affirmative defense of exhaustion.
Beneficial asserts that breach of contract and patent exhaustion are “two separate and distinct”
claims justifying the apportionment. The Court disagrees. “Where a cause of action based on
the contract providing for attorney’s fees is joined with other causes of action beyond the contract,
the prevailing party may recover attorney’s fees under Civil Code section 1717 only as they relate
to the contract action.” Abdallah v. United Sav. Bank, 43 Cal. App. 4th 1101, 1111 (Cal. Ct. App.
1996) (citing Reynolds Metals Co. v. Alperson, 25 Cal. 3d 124, 129 (1979).).

However,

“attorney’s fees need not be apportioned when incurred for representation on an issue common to
both a cause of action in which fees are proper and one in which they are not allowed.” Id. A
court may reasonably decline to apportion fees, when the various underlying claims are
“inextricably intertwined,” making it “impracticable, if not impossible, to separate the multitude of
conjoined activities into compensable or noncompensable time units.” Id.
The Court disagrees that Google’s breach of contract claim is “separate and distinct” from
the patent exhaustion issue. As set forth in detail in the Court’s order denying Beneficial’s
motion for judgment as a matter of law, the parties’ principal disputes center around whether the
Accused Google Customers’ use of DoubleClick would constitute contributory or induced
infringement by Google, but for the license. (See Dkt. No. 634.) In resolving such dispute, the

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Court examined, among other things, whether Google’s DoubleClick product “constitut[ed] a
material part of” of Beneficial’s invention, and whether DoubleClick has “no substantial
noninfringing use.” See 35 U.S.C. § 271(c) (setting forth the framework for proving contributory
infringement). These issues are common to both the determination of contributory infringement
– Google’s contract claim – and the affirmative defense of patent exhaustion. See Keurig, Inc. v.
Sturm Foods, Inc., 732 F.3d 1370, 1373 (Fed. Cir. 2013) (“[M]ethod claims are exhausted by an
authorized sale of an item that substantially embodies the method if the item (1) has no reasonable
noninfringing use and (2) includes all inventive aspects of the claimed method.”) Given that the
parties’ contract dispute centers on the nature and use of Google’s DoubleClick product, as does
the affirmative defense of patent exhaustion, the contract claim and exhaustion defense are
“inextricably intertwined,” making it impracticable for this Court to separate the various
“conjoined activities into compensable or noncompensable time units.” See Abdallah, 43 Cal.
App. 4th at 1111. Accordingly, the Court declines to apportion Google’s requested attorneys’
fees between its claim for breach of contract and the affirmative defense of exhaustion.2
Beneficial next complains that the hourly rates sought by Google for its trial counsel are
unreasonable. Where a contract provides for attorneys’ fees but does not specify a particular sum,
it is within the trial court’s discretion to determine what constitutes reasonable attorneys’ fees.
2

Google further argues that the attorney fees clause in the Settlement Agreement is “broad enough to cover tort as
well as contract cause of action,” citing three California cases Santisas, Johnson and Cruz. (See Dkt. No. 550 at 5-6.)
These cases, however, do not necessarily support Google’s position. In Santisas and Johnson, the attorney fees
clause specified that fees were recoverable in any action or proceeding “arising out of” the contract, regardless of
whether the action sounded in contract or in tort. See Santisas v. Goodin, 17 Cal. 4th 599, 608 (1998) (emphasis
added); Johnson v. Siegel, 84 Cal. App. 4th 1087, 1100 (Cal. Ct. App. 2000). Likewise, in Cruz, the contract stated
broadly that attorney fees were recoverable in “civil action[s]…in connection with” the contract. See Cruz v.
Ayromloo, 155 Cal. App. 4th 1270, 1277 (Cal. Ct. App. 2007). Here, in contrast, the Settlement Agreement stipulated
that attorney fees are only recoverable in actions or proceedings “alleging breach of this agreement.” (PTX 1,
Settlement Agreement, § VIII (emphasis added).) Unlike in Santisas, Johnson or Cruz, the attorney fees clause here
focuses on a contract cause of action, as opposed to, for example, an action in tort. Therefore, the Court is not
persuaded that such clause is clearly “broad enough to cover tort as well as contract cause of action.”

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Niederer v. Ferreira, 189 Cal. App. 3d 1485, 1507 (Cal. Ct. App. 1987) (citations omitted). The
major factors a court must consider in determining an attorneys’ fee award include: “the nature of
the litigation and its difficulty; the amount of money involved in the litigation; the skill required
and employed in handling the litigation; the attention given to the case; the attorney’s success,
learning, age and experience in the particular type of work demanded; the intricacy and importance
of the litigation; the labor and necessity for skilled legal training and ability in trying the case; and
the amount of time spent on the case.” Id. “When apprised of the pertinent facts, the trial court
may rely on its own experience and knowledge in determining the reasonable value of the
attorney’s services.” Id. (citation omitted). Here, after examining the hour rates sought by
Google’s trial counsel, the total amount of fees Google has requested, and comparing such against
the factors identified above, the Court concludes that Google’s fee request is reasonable.
Accordingly, the Court declines to unilaterally reduce the amount of Google’s requested attorneys’
fees.
c.

Google is not entitled to recover the costs for its expert witness

Finally, Beneficial contends that Google’s expert witness fees are not recoverable costs
under California law. California Code of Civil Procedure § 1033.5(a) specifies items of costs that
a prevailing party may recover in an action or proceeding, while § 1033.5(b) specifies items not
recoverable. See Cal. Civ. Proc. Code § 1033.5. “Fees of experts not ordered by the court” are
disallowed as costs under § 1033.5(b)(1). “[A]n undefined general contractual provision entitling
the prevailing party to ‘reasonable attorney’s fees and costs’ must be interpreted in light of Code of
Civil Procedure section 1033.5’s limited definition of costs.” Hsu v. Semiconductor Sys., Inc.,
126 Cal. App. 4th 1330, 1341 (Cal. Ct. App. 2005). Nevertheless, “[w]hile it is reasonable to

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interpret a general contractual cost provision by reference to an established statutory definition of
costs,” the California legislature did not intend to “prevent sophisticated parties from freely
choosing a broader standard authorizing recovery of reasonable litigation charges and expenses.”
Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC, 185 Cal. App. 4th 1050, 1065 (Cal. Ct. App.
2010). Recovery of such costs provided by contract, however, must ordinarily be “specially
pleaded and proven at trial,” and not awarded by a post-trial memorandum of costs. Hsu, 126 Cal.
App. 4th at 1341; Jones v. Union Bank of California, 127 Cal. App. 4th 542, 550-51 (Cal. Ct. App.
2005).
Here, the Settlement Agreement stipulates that the prevailing party on the contract may
recover:
not only the amount of any judgment or order, but also such other costs and
expenses as may be reasonably incurred by said Party, including court costs and
reasonable attorney fees and all other reasonable cost[s] and expenses, whether
taxed or otherwise, incurred in connection with said action or proceeding.
(PTX 1, Settlement Agreement, § VIII (emphasis added).)
The contract does not specify that expert fees are recoverable costs. Google argues that, despite
the statutory prohibition of recovery of expert fees as costs, it is entitled to such costs pursuant to
the “all other reasonable costs and expenses” language in the parties’ agreement. Applying
California law, this Court disagrees.
Google relies on Arntz, where the court allowed a prevailing party to recover costs beyond
those specified under § 1033.5(a), in light of the contract providing recovery of “all costs, charges
and expenses.” Arntz Contracting Co. v. St. Paul Fire & Marine Ins. Co.Arntz, 47 Cal. App. 4th
464, 491-92 (Cal. Ct. App. 1996). Google’s reliance on Arntz is misplaced. The Arntz court
allowed recovery of non-statutory costs because those costs were “specially pleaded and proven at
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trial.” Id. In this case, however, while Google’s Complaint in Intervention did pray for recovery
of costs, the costs for expert witnesses were never proven. (See Complaint in Intervention at 13.)
California cases more recent than Arntz have clarified that “[b]ecause costs other than those
allowed under section 1033.5 are not based on statute, they must be specifically pleaded and
proved at trial rather than included in a memorandum of costs.” Jones, 127 Cal. App. 4th at 551.
The reason for this pleading and proof requirement is that “the proper interpretation of a
contractual agreement for shifting litigation costs is a question of fact that turns on the intentions of
the contracting parties.” First Nationwide Bank v. Mountain Cascade, Inc., 77 Cal. App. 4th 871,
879 (Cal. Ct. App. 2000) (citing Davis v. KGO-T.V., Inc., 17 Cal. 4th 436, 447 (1998)). Unless a
contractual provision clearly and unambiguously specifies that certain costs are recoverable under
the contract, “[a]dverse parties must be put on notice through the pleadings that this contractual
theory will be asserted, and the issue must be submitted to the trier of fact for resolution pursuant
to a prejudgment evidentiary proceeding, not a summary postjudgment motion.” Id.; Thrifty
Payless, Inc., 185 Cal. App. 4th at 1067 (“[W]e deem it unnecessary to specially plead and prove
expert witness fees, at least in a case where expert fees are explicitly included in the contract as
recoverable costs.”).
Here, the Settlement Agreement does not specify that expert fees are recoverable costs.
Therefore, Google must prove that such fees are recoverable through an adverse proceeding. See
First Nationwide Bank, 77 Cal. App. 4th at 879. The Court previously precluded Google’s expert
from testifying to the issue of attorneys’ fees and costs at trial, partly out of concern that such fees
would continue to accrue during trial.

By the instant motion, Google sought recovery of

attorneys’ fees and costs under California Civil Code § 1717(a). It, however, did not offer to

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prove any non-statutory costs such as expert fees. For instance, Google did not submit any
evidence reflecting “the intentions of the contracting parties” that expert fees should be
recoverable under the Settlement Agreement. See First Nationwide Bank, 77 Cal. App. 4th at
879. The only supporting materials Google submitted together with this motion are itemized fees
and costs that it has incurred in this litigation. Given that the Settlement Agreement does not
explicitly include expert fees as recoverable costs, and Google did not prove that such fees are
recoverable under the contract, the Court is bound by § 1033.5. Pursuant to the California statute,
Google’s expert fees are not recoverable costs as they are “not ordered by the court.” Cal. Civ.
Proc. Code § 1033.5(b).
In summary, the Court finds that (1) Google is the prevailing party on the contract under
California Civil Code § 1717(a), and therefore is entitled to recover attorneys’ fees from
Beneficial; (2) Google’s requested attorneys’ fees are reasonable. However, Google is not
entitled to recover expert fees as costs. Accordingly, the Court REDUCES Google’s total fees
and costs request by $ 101,324.50 – the amount Google paid to its expert Dr. Alexander – and
AWARDS Google a total of $ 1,302,673.27 for fees and costs. (See Dkt. No. 538 at 10-11.)
III.

GOOGLE’S MOTION FOR ENTRY OF JUDGMENT
Pursuant to Federal Rule of Civil Procedure 54(b) and 58(b)(2)(A), Google requests that

this Court enter a final judgment including an express declaration that “Beneficial breached the
Settlement Agreement between Beneficial and Google by bringing a lawsuit against the Accused
Google Customers for infringement of the ’702 and ’943 patents based on their use of Google’s
DoubleClick product.” (See Dkt. No. 540-1 at 2.)
Google’s request is an exact duplication of the jury’s verdict. It is this Court’s practice to
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fully and accurately recite the jury’s findings in its final judgment. As such, including Google’s
proposed declaration in the final judgment would be redundant. Additionally, the jury’s factual
findings are not judicial declarations, in and of themselves. For these reasons, the Court denies
Google’s request for recital of its requested declaration, but otherwise grants its motion for entry of
judgment.
IV.

CONCLUSION

.
For the reasons stated above, the Court GRANTS-IN-PART and DENIES-IN-PART
Google’s Motion for Attorneys’ Fees, Costs and Expenses, and GRANTS-IN-PART and
DENIES-IN-PART Google’s Motion for Entry of Judgment. (See Dkt. Nos. 537, 540.) The
Court will proceed to enter a final judgment between Google and Beneficial consistent with the
rulings herein. See Fed. R. Civ. P. 54(b).

SIGNED this 19th day of December, 2011.
So ORDERED and SIGNED this 26th day of August, 2014.

____________________________________
RODNEY GILSTRAP
UNITED STATES DISTRICT JUDGE

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