Judge Andrews Considers Proper Calculation of Fee Award Under Court’s Inherent Power and Requests to Protect Fee Award

As previously reported, Judge Richard Andrews granted a motion for attorney fees in a patent infringement case under the Court’s inherent powers due to the plaintiff’s initiation of the suit without a good-faith belief that the accused products implemented the patented technology. Following supplemental briefing on the amount of attorney fees to be awarded, Judge Andrews has issued another opinion outlining the amount of fees that are owed. Parallel Iron LLC v. NetApp, Inc., C.A. No. 12-769-RGA, Memo. Op. at 16 (D. Del. Mar. 25, 2015).

Judge Andrews first rejected the plaintiff’s contention that the “lodestar” approach typically used to calculate attorney fees subject to a fee-shifting statute is not appropriate when fees are granted under the Court’s inherent powers. Id. at 6-7. Judge Andrews then rejected the argument that fees should be limited to the work associated with the plaintiff’s unsupported infringement contention because “Plaintiff was . . . sanctioned both for filing the suit and for its litigation tactics throughout. The entire period that Plaintiff accused pNFS instrumentalities is therefore the appropriate period for which to award fees.” Id. at 7-9. Furthermore, Judge Andrews found that defense counsel had not “performed unnecessary, frontloaded work . . . [because] responsible attorneys would not stand around and wait for months once their client has been accused of infringement and then rush to perform all their work once they get more specific information. It is reasonable to begin investigating and preparing a defense once an infringement suit has been brought.” Id. Judge Andrews also rejected arguments that evidence of settlement was used in violation of F.R.E. 408 and that the defendant was not entitled to fees incurred in connection with bringing a fee motion. Id. at 10-12.

Judge Andrews then found that the request for fees for hours worked was reasonable despite the fact that the hours were worked under a fixed fee arrangement. Judge Andrews’ only disagreement with the fees calculated by the defendant’s counsel was the hourly rate used. His Honor explained that under the “forum rule,” the hourly rate used should be that of intellectual property attorneys in Delaware rather than in New York City. Id. at 12-14. Finally, Judge Andrews refused to grant an injunction to prevent the plaintiff from dissipating assets and found that discovery into the plaintiffs finances was premature because judgment had not yet been entered, so allowing discovery would render Rule 69(a)(2), governing discovery from a judgment creditor, superfluous. Id. at 14-16.

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