United States District Court, D. Minnesota
M-I Drilling Fluids UK Ltd. and M-I LLC, Plaintiffs,
Dynamic Air Inc., Defendant.
D. Swain, Scott J. Pivnick, Alston & Bird LLP, The
Atlantic Building, Patrick J. Flinn, Alston & Bird LLP,
One Atlantic Center, and Casey A. Kniser and Eric H.
Chadwick, Patterson, Thuente, Christensen, Pedersen, PA, for
M-I Drilling Fluids UK Ltd. and M-I LLC
G. Carlson, Nathan Louwagie, and Todd S. Werner, Carlson,
Caspers, Vandenburgh, Lindquist, & Schuman, PA, for
Dynamic Air Inc.
REPORT AND RECOMMENDATION FILED UNDER SEAL
BOWBEER, United States Magistrate Judge
matter is before the Court on Defendant Dynamic Air
Inc.'s (“DAI”) Motion for Attorney Fees and
Costs [Doc. No. 285]. The matter has been referred to the
undersigned for a Report and Recommendation under 28 U.S.C.
§ 636 and District of Minnesota Local Rule 72.1(a) [Doc.
No. 358]. For the reasons set forth below, the Court
recommends granting the motion in part and denying it in
M-I Drilling Fluids Ltd. and M-I LLC (“M-I”) filed
this case in late 2014, accusing DAI of infringing five of
its U.S. patents. (Compl. [Doc. No. 1].) Approximately three
years into the litigation, the parties negotiated a
settlement pursuant to which M-I agreed to dismiss its case
and covenanted not to sue DAI on the asserted patents. (Order
and Opinion at 1 [Doc. No. 268].) Chief District Judge John
R. Tunheim granted M-I's motion to dismiss on September
20, 2016 [Doc. No. 269]. DAI filed a motion seeking to
recover attorneys' fees and costs on the ground that the
case was exceptional under 35 U.S.C. § 285 [Doc. No.
228]. This Court agreed, issuing a Report and Recommendation
finding the case exceptional and concluding that DAI was
entitled to recover its fees and costs. (R&R [Doc. No.
270].) Judge Tunheim adopted that Report and Recommendation
and directed DAI to file this motion itemizing its request
for fees and costs and providing supporting documentation.
(Order [Doc. No. 281].) The Court incorporates by reference
the detailed factual and procedural background set forth in
its Report and Recommendation and in Judge Tunheim's
Court now considers in this Report and Recommendation how
much DAI should recover of the more than two million dollars
in attorneys' fees and costs it states it expended in
responding to M-I's claims. M-I has objected to the
reasonableness of the amounts claimed overall, but has also
objected to recovery for certain activities M-I contends were
not reasonably necessary or were not reasonably related to
the federal court litigation, including fees incurred for
work done after October 15, 2015, for work done on an
unsuccessful request to file a motion for early summary
judgment, and for work done in connection with
Defendant's petition for inter parties review (IPR) of
the patents-in-suit before the U.S. Patent and Trademark
Office (“PTO”). M-I also objects to DAI's
request for costs in its entirety. In sum, M-I argues that
the most DAI is entitled to is an award of $541, 428.50 in
fees. (Pls.' Mem. Opp'n [Doc. No. 303].)
seeks $1, 563, 118 in attorneys' fees for litigation
before this Court and $302, 548.50 in attorneys' fees
associated with its IPR petition before the PTO. (Def.'s
Br. Supp. Mot. Attorneys' Fees & Costs at 17, 27
[Doc. No. 286]; Ex. 6 [Doc. No. 292] (Bassford Remele fee
invoices); Ex. 19 [Doc. No. 296] (Carlson Caspers federal
court fee invoices); Ex. 20 [Doc. No. 297]) (Carlson Caspers
inter partes review (“IPR”) fee
invoices); Ex. 30 [Doc. No. 298] (Carlson Caspers federal
court fee invoices).) M-I argues that the majority of the
fees sought by DAI should be denied because it was not
reasonably necessary or reasonably related to the federal
court case, or because DAI could have taken steps earlier
that would have ended the litigation. (Pls.' Mem.
Opp'n at 1-2 [Doc. No. 303].) First, M-I argues that DAI
dragged its feet in discovery, which prolonged the litigation
and caused DAI's attorneys to expend unnecessary hours of
work beyond the October 15, 2017, date by which M-I asserts
the lawsuit could have been resolved. (Pls.' Mem.
Opp'n at 10-14 [Doc. No. 303].) Second, M-I argues that
DAI is not entitled to any attorney fees incurred in
connection with its IPR petition because it was neither
reasonably necessary nor sufficiently related to the lawsuit.
(Id. at 18.) Third, M-I argues that certain work
performed by the Bassford & Remele law firm should be
excluded from any attorneys fee award because it was
duplicative of other work done by the Carlson Caspers law
firm. (Id. at 18-19.) Fourth, M-I argues that the
attorneys' fees stemming from DAI's attempted early
motion for summary judgment should be excluded because the
motion was premature and procedurally improper. (Id.
at 19-20.) Fifth, M-I argues that DAI should not be able to
recover fees expended researching antitrust counterclaims and
Rule 11 sanctions, because those claims were never brought.
Lastly, M-I argues that both the hourly rates charged and the
number of hours spent on the litigation were unreasonable,
and should be reduced accordingly. (Id. at 21-40.)
The Court will address each of these arguments in turn.
the American Rule, each party to a lawsuit generally bears
its own expenses unless an applicable statute authorizes fee
shifting. Hensley v. Eckerhart, 461 U.S. 424, 429
(1983). Section 285 of the Patent Act, applicable here,
authorizes the award of attorney fees to the prevailing party
in “exceptional cases, ” 35 U.S.C. § 285,
which courts determine “in the case-by-case exercise of
their discretion, ” Octane Fitness, LLC v. ICON
Health & Fitness, Inc., 134 S.Ct. 1749, 1758 (2014).
An exceptional case under § 285 is “simply one
that stands out from others with respect to the substantive
strength of a party's litigating position . . . or the
unreasonable manner in which the case was litigated.”
Octane Fitness, 134 S.Ct. at 1756. A patent suit
“presenting either subjective bad faith or
exceptionally meritless claims may sufficiently set itself
apart from mine-run cases to warrant a fee award.”
Id. at 1757. Additionally, a case need not
necessarily involve sanctionable conduct to be deemed
exceptional. Id. at 1756-57.
case has been found to be exceptional, appropriate
attorneys' fees must be measured based on the
“totality of the circumstances and not just discrete
acts of litigation conduct.” Homeland Housewares,
LLC v. Sorensen Research, 581 F. App'x 877, 881
(Fed. Cir. 2014) (quotation omitted). The lodestar
calculation provides the “guiding light” for
determining reasonable attorneys' fees. Perdue v.
Kenny A. ex rel. Winn, 559 U.S. 542, 551 (2010). Under
the lodestar method, an appropriate award of attorneys'
fees is calculated by multiplying the number of hours
reasonably expended on the litigation by a reasonable hourly
rate. Id. The number of hours reasonably expended
should exclude hours that are “excessive, redundant, or
otherwise unnecessary, just as a lawyer in private practice
ethically is obligated to exclude such hours from his fee
submission.” Hensley, 461 U.S. at 434. In
determining the overall amount of a fee award, “the
most critical factor is the degree of success obtained”
and courts may “reduce the award to account for the
limited success.” Id. at 436-37. However, if
“a prevailing party ‘has obtained excellent
results, his attorney should recover a fully compensatory
fee. Normally this will encompass all hours reasonably
expended on the litigation.'” Mathis v.
Spears, 857 F.2d 749, 755 (Fed. Cir. 1988) (quoting
Hensley, 461 U.S. at 435).
Attorneys' Fees for Work Taking Place After October 15,
argues that DAI should not receive any of the $1, 324, 238 in
fees it incurred after October 15, 2015, the date M-I
estimates it would have decided to dismiss the case had it
been timely provided with discovery it alleges was withheld
by DAI. (Pls.' Mem. Opp'n at 10-12 [Doc.
No. 303].) In particular, M-I asserts that DAI failed to
produce documents describing how the Accused Systems worked
by the August 14, 2015, deadline set in the Pretrial
Scheduling Order, and only provided them in early 2016 after
a motion to compel. (Id. at 10-11; see also
Pretrial Scheduling Order at 2 [Doc. No. 44]; Mot. Compel
[Doc. No. 135]; Order [Doc. No. 185].) M-I also faults DAI
for failing to promptly provide a Rule 30(b)(6) witness who
could explain and reconcile evidence that appeared to
suggest, contrary to DAI's litigation position, that DAI
was involved in the allegedly infringing activities of its
Brazilian affiliate Dynamic Air Limitada
(“Limitada”). (Pls.' Mem. Opp'n at 11 [Doc.
No. 303].) Had DAI accommodated these discovery requests, M-I
insists, it would have been able more quickly to evaluate
DAI's claims of non-involvement and thereby learn it did
not have a viable case to pursue. In other words, M-I argues
that the hours expended after October 15, 2015, were
“otherwise unnecessary, ” see Hensley,
461 U.S. at 434, and therefore should be excluded from the
attorneys fee award.
counters that, far from adopting a strategy of prolonging the
case, it had every incentive to end the litigation as quickly
as possible, and made several attempts to do so. (Def.'s
Reply Br. Supp. Mot. Attorneys' Fees at 2 [Doc. No.
351].) First, DAI points out that it moved to dismiss the
case on jurisdictional grounds at the very outset of the
litigation. (Id.; Mot. Dismiss [Doc. No. 16].)
Later, still in the hope of bringing the litigation to an
expeditious end, DAI attempted to file an early motion for
summary judgment. (Def.'s Reply Br. Supp. Mot.
Attorneys' Fees at 2 [Doc. No. 351].) According to DAI,
both steps make clear that its litigation strategy was geared
toward resolving the case as quickly and economically as
also disputes M-I's contention that it delayed producing
technical documents, and asserts that it promptly produced
all responsive engineering drawings in its possession, as
indicated in its September 2015 letter to M-I. (Def.'s
Reply Br. Supp. Mot. Attorneys' Fees at 2-3 [Doc. No.
351]; Werner Letter [Doc. No. 353-2].) As for the disputed
Rule 30(b)(6) deposition sought by M-I, DAI contends there
was no unreasonable delay; rather, it had legitimate
objections to the scope of M-I's Rule 30(b)(6) deposition
notice, objections that underlay its Motion for Protective
Order and Stay of Discovery [Doc. No. 106]. (Def.'s Reply
Br. Supp. Mot. Attorneys' Fees at 3 [Doc. No. 351].) DAI
stresses that M-I noticed 86 different topics for the Rule
30(b)(6) deposition at issue, many of which were based on
information predominantly if not solely in Limitada's
possession. (Def.'s Reply Br. Supp. Mot. Attorneys'
Fees at 2 [Doc. No. 351]; see also Werner Decl. Ex.
18 [Doc. No. 112-3].)
Court's task, then, is to determine if and to what extent
the work that took place after October 15, 2015, was
“excessive, redundant, or otherwise unnecessary.”
Hensley, 461 U.S. at 432. Appropriate attorneys'
fees must be measured taking into account the
“‘totality of the circumstances, ' and not
just discrete acts of litigation conduct.” Homeland
Housewares, LLC, 581 F. App'x at 881. In exercising
this discretion, “[t]here is no precise rule or formula
for determining attorney's fees.” Evans v. Jeff
D., 475 U.S. 717, 735-36 (1986) (citations omitted).
However, to arrive at a reasonable attorneys fee award,
courts must consider, inter alia, “what hours
were reasonably expended on what claims, whether that
expenditure was reasonable in light of the success obtained,
and what is an appropriate hourly rate for the services
based on the surrounding circumstances of the litigation and
the various factors that made it difficult for DAI to comply
with M-I's discovery requests, and with one exception
discussed below, the Court finds that DAI did not improperly
delay discovery and that the work that took place after
October 15, 2015, was not per se unreasonable. As
DAI consistently maintained throughout the litigation, DAI
and Limitada operate independently of each other, with no
overlap in officers or employees, and keep their files
separately on different computer networks. (Steele Decl.
¶¶ 8-12 [Doc. No. 109].) Under those circumstances,
it was reasonable for DAI to object to discovery seeking
documents not within its possession or control, as DAI did
here. With respect to M-I's argument that
DAI's obstructionist tactics delayed the taking of the
Rule 30(b)(6) deposition, DAI's objections to the scope
of that deposition, set forth in its motion for a protective
order [Doc. Nos. 106, 108], and its refusal to make its
corporate representative available until the scope had been
resolved, were also reasonable. M-I sought to depose a DAI
designee on dozens of topics as to which no employee at DAI
had personal knowledge. For instance, the deposition sought
to cover the design, development, and manufacture of the
Accused System and its installation on the U.S. flagged
ships. (Third Notice Deposition Def. Fed.R.Civ.P. 30(b)(6)
¶ 8 [Doc. No. 112-3].) But the Accused System was solely
developed and implemented by Limitada in Brazil with neither
oversight nor direction from DAI. It was therefore not
unreasonable for DAI to seek a ruling from the Court in
advance of the deposition regarding whether it was required
to prepare its corporate representative to testify about
information uniquely within the ken of Limitada, which would
have required a Limitada employee to fly from Brazil to the
United States to help prepare a DAI designee. (Mem. Supp.
Mot. Protective Order at 13 [Doc. No. 108].) Therefore, the
Court cannot conclude that DAI's work after October 15,
2015, was per se excessive, redundant, or otherwise
even though M-I takes issue with DAI's responsiveness to
its discovery requests, the Court has already found that M-I
did not have an objectively reasonable basis to bring its
claims against DAI in the first place. A district court need
not limit attorneys' fees to those hours expended
responding to specific acts of litigation misconduct, and may
measure attorneys' fees based on the totality of
circumstances of the litigation. Homeland Housewares,
LLC, 581 F. App'x at 881; Brasseler U.S.A.
I.L.P. v. Stryker Sales Corp., 267 F.3d 1370, 1386 (Fed.
Cir. 2001). As one court held,
Where a plaintiff's case is exceptionally weak on the
merits, as here, rather than because of litigation
misconduct, this rule counsels full fee-shifting from the
time the case became exceptionally weak on the merits. The
entire case from that point on is exceptional and the extra
legal effort required to counteract the lawsuit includes the
entirety of a vigorous defense.
Tech. Props. Ltd. LLC v. Canon Inc., No. 14-3640,
slip op. at 5 (N.D. Cal. Apr. 12, 2017). Federal courts
routinely award attorneys' fees under § 285 for work
done after the point at which it can be determined a patent
lawsuit lacked merit. See, e.g., Vehicle Interface
Techs., LLC v. Jaguar Land Rover N. Am., LLC, No. CV
12-1285-RGA, 2016 WL 3436396, at *1 (D. Del. June 15, 2016)
(awarding attorneys' fees from the date patentee had full
notice its case was objectively baseless). Awarding
attorneys' fees for expenses incurred to litigate the
meritless aspects of a patent lawsuit makes sense in view of
the purpose of the Patent Act's fee shifting provision,
which is to “compensate[e] the prevailing party for the
costs it incurred . . . where it would be grossly unjust . .
. to require it to bear its own costs.” Highmark,
Inc. v. Allcare Health Mgmt. Sys., Inc., 687 F.3d 1300,
1310 (Fed. Cir. 2012), vacated on other grounds and
remanded, 134 S.Ct. 1744 (2014). Here, M-I's case
was “exceptionally unmeritorious from the time it filed
the 2014 Complaint.” (R&R at 26.) Requiring DAI to
bear all attorney fees incurred after October 15, 2015, on
the ground that it should have produced discovery more
quickly in a case it should not have had to defend in the
first place would fly in the face of the statutory scheme.
Therefore, the attorneys' fees expended by DAI for work
done in connection with this litigation after M-I filed its
complaint are potentially eligible for fee-shifting.
That being said, the Court notes that DAI's counsel
represented at the pretrial scheduling conference on June 29,
2015, that DAI could and would produce engineering drawings
and information concerning the materials conveyed by its
systems (see Pretrial Scheduling Order at 2 [Doc.
No. 44]), a representation that was at variance with
DAI's later objections that it did not have control over
those documents in Limitada's possession. While the Court
does not waver from its conclusion that this litigation was
meritless from the outset, the Court is persuaded that at
least some of the expense associated with the subsequent
discovery disputes could have been avoided but for that offer
and the back-pedalling that followed. Therefore, the Court
recommends that the fees sought by DAI in connection with the
federal court litigation be reduced by $50, 000.
does not mean, however, that all other fees incurred
after October 15, 2015, are necessarily reasonable and
compensable. The Court turns, therefore, to the other
objections raised by M-I.
Attorneys' Fees for Inter Partes Review
seeks $302, 548.50 in attorneys' fees for 651.5 hours of
work to prepare and file IPR petitions. (Def.'s Br. Supp.
Mot. Attorneys' Fees & Costs at 27 [Doc. No. 286];
Carlson Decl. ¶ 41 [Doc. No. 297].) Inter partes review
is a legal proceeding before the PTO's Patent Trial and
Appeal Board (PTAB) whereby a petitioner seeks cancellation
of some or all of the claims of a patent, either on novelty
or non-obviousness grounds, based on prior art found in
patents or printed publications. 35 U.S.C. § 311(b).
Congress created IPR in 2011 to be a “quick and cost
effective alternative to litigation.” H.R. Rep. No.
112-98, pt. 1, at 48 (2011). To that end, IPRs are often
utilized as one line of defense against an infringement claim
by contesting the validity of the patent asserted.
See 35 U.S.C. § 315(b) (authorizing IPR within
one year of petitioner being served a complaint alleging
patent infringement); see also Brian J. Love &
Shawn Ambwani, Inter Partes Review: An Early Look at the
Numbers, 81 U. Chi. L. Rev. Dialogue 93, 103 (2014)
(finding that 80% of IPRs correlate with underlying
litigation on the challenged patent). In the instant case,
M-I sued DAI for infringing five of its U.S. patents, and DAI
responded in part by initiating an IPR to challenge each of
the 117 claims of the asserted patents.
argues that DAI is not entitled to any fees it incurred in
petitioning for IPR. (Pls.' Mem. Opp'n at 18 [Doc.
No. 303]; Conneely Decl. ¶ 32 [Doc. No. 329].) Courts
have awarded attorneys' fees under § 285 for legal
services rendered in connection with proceedings before the
PTO where doing so was reasonably necessary or related to the
underlying patent lawsuit. See PPG Indus., Inc. v.
Celanese Polymer Specialties Co., 840 F.2d 1565, 1568
(Fed. Cir. 1988); see also Chaffin v. Braden, No.
6:14-0027, 2016 WL 5372540, at *2 (S.D. Tex. Sept. 26, 2016).
Here, however, M-I asserts the IPR proceedings had no bearing
on the outcome of the case. (Pls.' Mem. Opp'n at 18
[Doc. No. 303]; Conneely Decl. ¶ 32 [Doc. No. 329].) The
parties settled the lawsuit while the IPRs were still
pending, and M-I claims they did not play a significant role
in the settlement. (Pls.' Mem. Opp'n at 18 [Doc. No.
303].) Further, M-I posits that DAI pursued the IPR process
for a purpose unrelated to this litigation, i.e., hoping that
if the PTAB invaliDated: least some of the asserted claims,
it would reduce potential liability for DAI's subsidiary
Limitada. (Id; Pivnick Dec. ¶ 14 [Doc. No.
305].) By either view, M-I argues that the IPRs were decided
too late to affect the outcome of this lawsuit, and therefore
were not reasonably necessary or related to the lawsuit.
additionally argues that DAI should not recover
attorneys' fees for its IPR petitions because it did not
move to stay the federal court proceedings while the IPRs
were pending. (Pls.' Mem. Opp'n at 16 [Doc. No.
303].) M-I suggests that if no stay is sought, IPR-related
fees are extraneous because they do not properly allow the
IPR determination to shape the outcome of the litigation.
They note that this distinguishes the instant case from the
PPG Industries case, in which the Federal Circuit
held that an award of attorneys' fees for proceedings
before the PTO was appropriate when the PTO proceedings
essentially “substituted for the district court
litigation.” PPG Indus., Inc., 840 F.2d at
1569. See also, Deep Sky Software, 2015 WL 10844231,
at *4 (awarding attorneys' fees incurred in connection
with PTO proceedings where the district court stayed the
litigation to await PTO guidance that could influence the
outcome of the litigation).
argues that a prevailing party in an exceptional case is
entitled to attorneys' fees for IPR petitions so long as
those petitions relate to the suit, regardless of whether the
case was stayed in the meantime, and regardless of whether
the IPR decision directly influenced the outcome of the
lawsuit. (Def.'s Br. Supp. Mot. Attorneys' Fees &
Costs at 27 [Doc. No. 286].) Cf. Cent. Soya Co. v. Geo.
A. Hormel & Co., 723 F.2d 1573, 1578 (Fed. Cir.
1983). DAI urges that its IPR-related attorneys' fees are
directly related to the suit because they were incurred in
support of a patent invalidity defense to the infringement
claims M-I asserted in its complaint. Moreover, DAI argues,
it actually attempted to save money by seeking inter parties
review because IPR proceedings are more cost effective than
federal court litigation. (Def.'s Br. Supp. Mot.
Attorneys' Fees & Costs at 15 [Doc. No. 286].) As for
its failure to file a motion to stay, the PTAB did not
institute the IPR until after M-I had agreed to dismiss the
case. (Pivnick Decl. ¶ 12-14 [Doc. No. 305].)
into account the “totality of the circumstances”
of this case, the Court recommends that DAI not be awarded
its attorneys' fees incurred to prepare and file its IPR
petitions. DAI overgeneralizes the circumstances in
which courts have been willing to award IPR-related
attorneys' fees in exceptional cases. In the handful of
district court cases DAI cites, courts typically awarded
attorneys' fees associated with PTO proceedings either
where there was a stay of the related district court case,
such that the PTO proceedings effectively took the place of
the federal court litigation,  or where the court determined the
PTO's decision played a central role in determining the
outcome of the federal court case. While in one case cited by
DAI, the district court awarded attorneys' fees for a
reexamination based on “the extent of the effort
required to defend against the objectively baseless claim,
” the court did not comment on whether the outcome of
the reexamination was central to the court's ultimate
conclusion regarding the merits of the case. IA Labs CA,
LLC v. Nintendo, No. CIV. PJM 10-833, 2012 WL 1565296,
at *4 (D. Md. May 1, 2012), aff'd, 515 F.
App'x 892 (Fed. Cir. 2013). Here, the basis for the
Court's determination that the case was objectively
baseless was the absence of sufficient grounds to believe
that DAI was itself involved in any of Limitada's
allegedly infringing activity. The Court did not find - and
DAI did not argue - that the lawsuit was baseless because M-I
should have known the patents were invalid. While, as will be
discussed in greater detail below, DAI was not required to
“pick just one horse” and forgo developing other
litigation defenses to M-I's claims, the Court concludes
under the circumstances of this case that an award of
attorneys' fees incurred in connection with DAI's
attack on the patents in an entirely different forum, while
the lawsuit continued in the district court and was
ultimately resolved for reasons that had nothing to do with
the IPR proceedings, would go too far. Accordingly,
the Court recommends that the $302, 548.50 in attorneys'
fees incurred in connection with the IPR petitions be
excluded from the award of attorneys' fees to DAI.
Bassford Remele's Fees Incurred after May 6,
seeks $5, 016 in fees for time billed by Bassford Remele
after May 6, 2015. (Pls.' Mem. Opp'n at 19 [Doc. No.
303].) Attorneys from Carlson Caspers began billing on this
matter on April 22, 2015, and entered an appearance on May 5,
2015. (Id.; Ex. 6 [Doc. No. 292].) Attorneys from
Bassford Remele continued to bill on the matter for an
additional five months “to help the attorneys at
Carlson Caspers get up to speed.” (Hickey Decl. ¶
6 [Doc. No. 289].) M-I argues that nearly all of this time
duplicated work being done by attorneys at Carlson Caspers.
M-I cited one case in support of this argument, Howes v.
Med. Components, Inc., 761 F.Supp. 1193, 1198 (E.D. Pa.
1990). In that case, the court found that co-counsel
duplicated efforts and that the fee claimants failed to prove
the services were reasonably expended. Here, the Court finds
the $5, 016 expended by Bassford Remele after May 6, 2015 to
be reasonable. In complex patent litigation spanning two
continents, it does not seem unreasonable that there should
be some moderate amount of overlap in tenure between the
original counsel and the team of patent litigators
subsequently hired to take over the suit, to assure that the
latter are fully briefed on what had transpired before they
entered the fray, and to allow for consultation during the
transition as new questions arose. Therefore, the Court
recommends that the district court not exclude from the award
to DAI the $5, 016 in fees billed by Bassford Remele after
May 6, 2015.
DAI's Summary Judgment Motion
argues that DAI should not be reimbursed for $47, 827.50 in
fees in connection with its attempt to file an early motion
for summary judgment of non-infringement. (Pls.' Mem.
Opp'n at 19 [Doc. No. 303].) It points out that the
attempted motion was procedurally improper because DAI failed
to ask for permission to file it, as required by the Pretrial
Scheduling Order,  and because DAI had not produced overdue
discovery. (Pls.' Mem. Opp'n at 5, 19-20 [Doc. No.
303].) M-I further contends the motion could not have been
successful in any event because the evidence M-I had in its
possession at that point created a genuine dispute of
material fact that precluded summary judgment of
non-infringement. DAI acknowledges it failed to seek
permission from the Court before filing the motion, and that
the Court denied its belated request for permission on the
ground that discovery was not yet complete. (Order Den.
Def.'s Mot. Summ. J. [Doc. No. 122].)
difficult to estimate how much DAI would have incurred in
attorney fees had it followed the process required by the
Pretrial Scheduling Order. A prevailing party is entitled
only to reasonable attorneys' fees, and thus extraneous
or unnecessary fees should be excluded from any award.
Hensley, 461 U.S. at 434. Legal fees incurred
preparing a procedurally improper motion certainly involve
unnecessary expense. If DAI had followed the requirements of
the Pretrial Scheduling Order, asking permission rather than
forgiveness, the motion would not have been filed. On the
other hand, at least some of the work associated with
preparing the motion would have been necessary in any event
to prepare a meaningful request for permission. Therefore,
the Court recommends reducing by 75% the $47, 827.50 in
attorney fees billed in connection with the summary judgment
motion, leaving $11, 956.88 to be included in the award to
Fees for Unasserted Antitrust Counterclaims and a Rule 11
seeks $32, 856 in fees for time billed in connection with
exploring possible antitrust counterclaims and a Rule 11
violation letter; the former were never asserted and the
latter was never served. Courts have recognized generally
that fees should be awarded only for hours “expended in
furtherance of successful claims, or of claims closely
related to successful claims.” Whitworth v.
Nat'l Enter. Sys., No. CV 08-968-PK, 2010 WL
1924505, at *6 (D. Or. Apr. 21, 2010), R&R
adopted, 2010 WL 1923673 (D. Or. May 11, 2010) (citing
Sloman v. Tadlock, 21 F.3d 1462, 1474 (9th Cir.
1994)). However, courts have also recognized that parties
should not be penalized “for pursuing one defense
theory over another.” Kinglite Holdings Inc. v.
Micro-Star Int'l Co., No. CV1403009JVSPJWX, 2016 WL
6953449, at *3 (C.D. Cal. Aug. 31, 2016) (citing Home
Gambling Network, Inc. v. Piche, No. 2:05-cv-610-DAE,
2015 WL 1734928, at *9 (D. Nev. Apr. 16, 2015). Here, the
Court does not find these exploratory forays, the output of
which apparently did not see the light of day in this
litigation, to be sufficiently related to the underlying
patent infringement matter. Accordingly, the Court recommends
that the fee award to DAI not include the $32, 856 in fees
related to unasserted antitrust counterclaims and the
unserved Rule 11 violation letter.
Litigation of Disputes Relating to Inspection of the Accused
argues that DAI filibustered its efforts to inspect the
Accused Systems located on two ships that were in port in
Brazil, resulting in unnecessary litigation expense for which
M-I should not be compensated. (Pls.' Mem. Opp'n at
20 [Doc. No. 303].) In the late summer of 2015, M-I and DAI
engaged in a contentious dispute regarding whether and how
M-I would be able to gain access to and inspect two ships-the
HOS Resolution and the HOS Pinnacle-upon which the Accused
Systems had been installed. (R&R 33-35; Pivnick Decl.
¶¶ 15-24 [Doc. No. 305].) M-I contends DAI
prevented it from inspecting the ships, made no effort to
attempt to comply with M-I's June 26, 2015, Notice of
Inspection, did not fully comply with this Court's order
requiring that it attempt to facilitate an inspection, and
provided incomplete or misleading information regarding a
scheduled inspection that ultimately was not successful.
(Pivnick Decl. ¶¶ 15-24 [Doc. No. 305].) According
to M-I, at each step DAI obstructed or delayed its efforts to
seek discovery to which it was entitled, and the $158, 045.50
fees incurred by DAI in doing so were unnecessary and should
not be reimbursed. (Pls.' Mem. Opp'n at 21 [Doc. No.
part, DAI insists it had no power to arrange the inspections
M-I demanded, and, given the circumstances, it did the best
it could to accommodate M-I's requests. (Def.'s Reply
Br. Supp. Mot. Attorneys' Fees at 4 [Doc. No. 351].)
Further, DAI asserts that it reiterated this point to M-I
throughout the litigation, making clear it had no power to
grant the inspections. The ships in question were owned by
Hornbeck Offshore Services, Inc. and leased to Petrobras, the
Brazilian government-owned oil company. DAI stressed to M-I
that it had no involvement with the ships at all, and even
Limitada's operations constituted only a small portion of
the activities performed on the ships. (Carlson Decl. Ex. 31
¶¶ 1-4 [Doc. No. 295-22].) With these
considerations in mind, this Court previously determined in
its February 2, 2017, Report and Recommendation that DAI did
not act in an obstructive manner during the inspections,
finding that, although “DAI and its counsel may well
not have done all that the Court's Order required,
” there was no reason to believe additional efforts by
DAI would have secured the inspections M-I sought. (R&R
at 35 [Doc. No. 270].) Granted, the fees attributed to this
chapter of the case are high. But the docket contains no less
than two dozen entries relating to the disputes over the
requested inspections, most of which are motions or responses
to motions brought by M-I that seek sanctions up to and
including default judgment against DAI for the
“spoliation of evidence” allegedly resulting from
DAI's failure to arrange for the inspections. See,