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PROMEGA CORPORATION, Plaintiff, vs. LIFECODES CORPORATION, et al., Defendants.

ORDER

TENA CAMPBELL, U.S. District Judge

On February 22, 2000, Promega Corporation was awarded $499,161.54 in enhanced damages and $60,606.38 for attorney fees charged by local counsel. Promega was directed to file a supplemental memorandum in which: (1) prejudgment interest was calculated, and (2) the work performed by the Limbach Limbach ("Limbach") law firm and the expenses incurred litigating this case are described with sufficient detail that the court could determine the reasonableness of the fees and expenses. The court conducted a hearing on this matter on June 19, 2000, after which the parties filed additional memoranda. Having fully considered the arguments of counsel, the submissions of the parties and applicable legal authorities, the court now enters the following order.

Discussion

A. Prejudgment Interest

Lifecodes Corporation ("Lifecodes") accepts Promega's calculation of prejudgment interest, in the amount of $116,930.11 through March 31, 2000, and $54.83 per day thereafter until final judgment is entered.

B. Fees and Expenses

Promega contends that it is entitled to an award of attorneys' fees and expenses of $976,467.39 for work performed by the Limbach law firm, and an award $64,775.98 for work performed by Paul N. Shields, Promega's damages expert. (See Pl. Promega Corp.'s Suppl. Mem. Calculating Prejudgment Interest, Attorneys' Fees Costs at 6; Decl. of Paul N. Shields in Resp. to Crt.'s Req. at ¶ 4.) Lifecodes contends that the amount sought should be reduced by $582,941.89 because: (1) some of the fees and expenses claimed are not allowable under 35 U.S.C. § 285; (2) excessive time was billed for the tasks performed; and (3) some of the fees and expenses claimed for work performed by Shields are unreasonable.

Promega has previously been awarded $60,606.38 for attorney fees charged by local counsel. (See Order, Feb. 22, 2000.)

1. Fees and Expenses Not Recoverable Under Patent Law

Lifecodes contends that $265,703.21 of the $976,467.39 claimed by Promega as attorney fees and expenses are not recoverable under 35 U.S.C. § 285. (See Lifecodes' Further Obj. to Promega's Pet. Attorney Fees Expenses at 3.)

35 U.S.C. § 285 provides that a "court in exceptional cases may award reasonable attorney fees to the prevailing party."

Before this suit was filed, Promega instituted an arbitration proceeding against Lifecodes to settle a contractual dispute the parties had concerning the terms of a licensing agreement. The arbitrator's jurisdiction was limited to contractual issues and did not extend to questions arising under patent law. Promega then filed this lawsuit for patent infringement. Lifecodes admitted both the validity of Promega's patent and that it infringed the patent. The only issue that needed to be resolved in this lawsuit was the amount of damages Lifecodes owed Promega. Lifecodes contends that some of the fees and expenses Promega now seeks were related solely to the licensing agreement, not the amount of damages Promega was entitled to for patent infringement, and thus are not recoverable under 35 U.S.C. § 285.

Section 285 gives a court authority to award the prevailing party attorney fees incurred in claims arising under the patent laws. See Interspiro USA, Inc. v. Figgie Int'l Inc., 18 F.3d 927, 933 (Fed. Cir. 1994). "A claim arises under the patent laws if the right to relief `will be defeated by one construction, or sustained by the opposite construction of [the patent] laws.'" Id. (quoting Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 807-08 (1988)). "When an action combines both patent and nonpatent claims, the nonpatent issues may in some instances be so intertwined with the patent issues that the evidence would, in large part, be material to both issues." Stickle v. Heublein, Inc., 716 F.2d 1550, 1564 (Fed. Cir. 1983). If the patent claims are separable from the nonpatent claims, the attorneys' fee award can include only those fees incurred litigating the patent claims. See id.

The court agrees with Lifecodes. The fees and expenses Lifecodes objects to were incurred litigating issues not related to this action for patent infringement. Accordingly, the court deducts $265,703.21 from the fees and expenses Promega seeks because they are not compensable under 35 U.S.C. § 285.

2. Reasonableness of Hours Expended on Tasks

Lifecodes maintains that the amount of time the Limbach firm expended on tasks throughout this litigation was excessive, and therefore, a 25% across-the-board reduction in fees and expenses is warranted. However, Promega had the burden of proof in this difficult and complex case. Based on the amount in controversy, it was prudent and reasonable for Promega's counsel to research and brief fully all issues raised. Further, extensive adjustments and deductions have already been made to the fees and expenses charged.

Accordingly, the court declines to make an across-the-board reduction to the fees and expenses.

3. Reasonableness of Fees and Expenses of Damages Expert

Promega seeks $64,775.98 in expenses for payments it made to its damages expert, Paul N. Shields. Lifecodes does not dispute the reasonableness of the rates charged; however, it argues that $18,595.52 of that amount resulted from work that was either not related to patent infringement or that was not reasonably necessary.

After reviewing the itemized billing records of Shields, the court declines to accept Lifecodes' arguments. For example, Lifecodes takes the position that during October and November 1997, the damages expert billed $1,817.61 for fees and expenses incurred in exploring a lost profits claim that had been addressed in the arbitration award. The court has reviewed Shield's billing records and finds that the fees and expenses objected to were incurred researching issues related to the amount of damages Promega was entitled to for patent infringement (i.e., lost profits and royalties).

The fees and expenses charged by Promega's damages expert were reasonable and necessary. Accordingly, Promega is entitled to $64,775.98 in expenses for payments made to Shields.

Order

For the foregoing reasons, the court enters the following order:

1. Promega is awarded prejudgment interest in the amount of $116,930.11 through March 31, 2000, and $54.83 per day thereafter until final judgment is entered; and
2. Plaintiff is awarded $710,764.18 for fees and expenses incurred for work performed by the Limbach law firm and $64,775.98 for expenses incurred for work performed by Paul N. Shields.

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PROMEGA CORPORATION v. LIFECODES CORPORATION
(Aug 22, 2000)