The opinion of the court was delivered by: ARTHUR D. SPATT
On July 11, 1995, the Court issued a decision in this case finding that the defendants Intermedics Orthopedics, Inc. ("Intermedics" or "IOI") and Marli Medical Supplies, Inc. ("Marli") literally and willfully infringed claims 8, 10 and 12 of United States Patent No. 4,888,023 ("the 023 patent") by designing, marketing and selling a femoral prosthesis known as the APR II and its successor the APR II-T (the APR II and APR II-T shall be referred to as the "APR II"). In addition, the Court determined that the defense of reverse doctrine of equivalents was unavailable to Intermedics, because the APR II does not function in a substantially different way from the 023 patent. The Court further determined that the 023 patent is valid and enforceable.
The Court also concluded that the plaintiff Osteonics Corporation ("Osteonics") had proven its lost profits. Based on the evidence adduced at trial, the plaintiff was awarded lost incremental profits for the period May 1, 1990 to March 31, 1993 in the sum of $ 23,421,076, together with prejudgment interest at the prime rate for the period May 1, 1990 until July 15, 1993 in the sum of $ 2,927,908. The Plaintiff's total damage award was $ 26,348,984. This award was enhanced by doubling the amount of the award, thus resulting in total damages to Osteonics of $ 52,697,968. Finally, the Court held that Osteonics was entitled to an award of reasonable attorneys' fees and costs, and permanent injunctive relief against further infringement.
Presently before the Court is Osteonics's application for reasonable attorneys' fees and costs pursuant to 35 U.S.C. § 285 (the "fee application"), and a proposed form of Judgment. For the purposes of this decision, the defendants and the plaintiffs shall be referred to in the singular.
The Plaintiff's Fee Application and the Defendant's Objections.
Originally, the plaintiff submitted its application for reasonable attorneys' fees in the amount of $ 5,059,905.50, and for disbursements in the amount of $ 1,036,509.66. Its total application for reasonable attorneys' fees and disbursements was in the amount of $ 6,096,415.60. In addition, the plaintiff sought to add $ 679,004 in prejudgment interest to this amount, in order to be compensated for the amount of fees and costs it has already paid during the course of this litigation, which it estimates to be $ 3,994,836. The initial fee application, however, has been revised at the direction of the Court. The revisions will be discussed below in more detail.
The plaintiff's initial fee application represents compensation to its attorneys, the law firm of Morgan & Finnegan, LLP ("M&F"), for a total of 23,858.05 in attorney hours and 9,551.825 in law clerk and paralegal hours spent in litigating this case. The fee application encompasses the five year period from August 1990 until July 1995, which period has been delineated by the plaintiff as consisting of the following seven phases: (i) the commencement of this action in August, 1990, and defending against an action for a declaratory judgment on the validity of the 023 patent filed by the defendant Intermedics in the Western District of Texas after the plaintiff commenced the present action (the "Declaratory Judgment action" or "Texas action"); (ii) fact discovery on the merits of liability and damages; (iii) expert witness discovery and preparation of expert reports; (iv) preparation of pre-trial memoranda, motions and exhibits; (v) witness preparation and the conducting of a trial on all issues; (vi) preparation of post-trial memoranda and presentation of closing arguments; and (vii) preparation of the present application for reasonable attorneys' fees and costs. The plaintiff's initial fee application is set forth in the Affidavit of Robert E. Paulson, Esq., dated July 26, 1995 ("Paulson Affidavit"), and the fees and costs associated with each of the aforementioned phases are summarized in Exhibit C to the Paulson Affidavit.
On the other hand, the defendant raises several objections to the fee application. First, it contends that the application improperly seeks compensation for fees paid to expert witnesses. According to the Intermedics, 35 U.S.C. § 285 does not authorize an award of expert witness fees, and any such award in this case must be within the $ 40 per day limit set forth in 28 U.S.C. 1821(b).
Second, the defendant contends that it was improper for the Court to double the amount of prejudgment interest granted to the plaintiff when the plaintiff's damages award was enhanced. The defendant argues that prejudgment interest is compensatory in nature, and cannot be applied to the punitive aspect of an award.
Third, the defendant contends that, for reasons similar to those concerning the impropriety of doubling the prejudgment interest award, the plaintiff cannot seek prejudgment interest with respect to the amount of attorneys' fees it has already expended to date.
Fifth, the defendant contends that the fee application itself is not supported by adequate documentation. According to Intermedics, "entire pages of time entries have been redacted from the submitted materials" and M&F has failed to submit its actual attorney diary entries, thereby making it difficult for the defendant to challenge the application. In certain instances, the defendant claims that the records aggregate work performed by several attorneys, and do not allow the Court to ascertain the amount of time individual attorneys expended on certain tasks. Moreover, Intermedics contends that it cannot distinguish to what extent the fee application concerns expenses related to the reexamination proceedings before the Patent Office.
Finally, Intermedics contends that the fee application is exorbitant and excessive, and includes much duplication of tasks.
Calculation of Attorneys' Fees in a ...