Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-01664/USCOURTS-cand-4_04-cv-01664-6/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 28:1338 Copyright Infringement

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SMITH & HAWKEN, LTD.,

Plaintiff(s),

 vs.

GARDENDANCE, INC., et al.,

Defendant(s).

 /

No. C 04-1664 SBA (MEJ)

REPORT AND RECOMMENDATION

RE: 

(1) PLAINTIFF'S MOTION FOR AN

AWARD OF PREVAILING PARTY

ATTORNEY'S FEES; AND

(2) PLAINTIFF'S MOTION FOR

SANCTIONS

I. INTRODUCTION

Before the Court is Plaintiff's Motion for (1) an Award of Prevailing Party Attorney's Fees Pursuant

to 17 U.S.C. § 505 and (2) an Order of Sanctions Against GardenDance and their Counsel, filed on

August 15, 2005. After careful consideration of the parties' papers, oral arguments at the December 1,

2005 hearing, the applicable statutory and case law authorities, and good cause appearing, the Court

hereby RECOMMENDS that the District Court GRANT Plaintiff's motion for attorney's fees and DENY

Plaintiff's motion for sanctions for the reasons set forth below.

II. BACKGROUND

Plaintiff Smith & Hawken, Ltd. ("Plaintiff") and defendant GardenDance, Inc. ("GardenDance") are

both in the business of selling outdoor garden torches. On January 15, 2005, Plaintiff received a letter from

outside counsel for GardenDance which alleged that GardenDance owned "copyright VA-967-403 for a

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 1 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 2

Tiki Design Torch" and demanded that Plaintiff cease and desist from selling the "infringing torches." 

Compl. ¶ 10. On April 28, 2004, Plaintiff filed a complaint against GardenDance and Mark Donley

(collectively, "Defendants") for declaratory relief. Plaintiff sought a determination that it had not infringed

any copyright owned by GardenDance by reason of its sale of outdoor garden torches. On May 11, 2004,

Plaintiff amended its complaint to include a requested determination that GardenDance's copyright in its

torch was invalid.

On June 25, 2004, Defendants filed an answer and asserted six counterclaims, alleging copyright

infringement, trade dress infringement, unfair competition, civil RICO claims, and a request for declaratory

and injunctive relief.

On August 30, 2004, Plaintiff filed a Motion to Dismiss all of Defendants' counterclaims, with the

exception of the claim for copyright infringement. By Order dated November 5, 2004 ("November 5

Order"), the Honorable Saundra Brown Armstrong granted Plaintiff's motion and dismissed the

counterclaims without prejudice. Judge Armstrong granted Defendants leave to file amended counterclaims

within thirty days of the Order, instructing Defendants that "[a]ny and all amended counterclaims []

specifically set forth each cause of action that Defendants seek to bring against Plaintiff and provide

factual allegations consistent with the original pleading sufficient to support each cause of action." 

Id. at 16 (emphasis in original). Judge Armstrong further ordered that any amended counterclaims

Defendants file "must comply with Federal Rule of Civil Procedure 11." Id. To the extent that Defendants

did not amend their counterclaims within the time set forth in the November 5 Order, Judge Armstrong

warned that the Court "may dismiss Defendants' counterclaims with prejudice, either sua sponte or on

motion of the Plaintiff." Id. (emphasis in original).

On December 14, 2004, Plaintiff filed a second Motion to Dismiss as Defendants had not filed

amended counterclaims. On February 8, 2005, Judge Armstrong granted Plaintiff's second motion and

dismissed the counterclaims (with the exception of the claim of copyright infringement) with prejudice.

On May 16, 2005, Plaintiff filed a Motion for Summary Judgment seeking a declaration that

GardenDance's torch was not entitled to copyright protection and that it could not be infringed as a matter

of law. On July 28, 2005, Judge Armstrong granted summary judgment for Plaintiff ("July 28 Order"),

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 2 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 3

stating that it successfully overcame the presumption of validity of the copyright registration for

GardenDance's torch, that such torch was merely a useful article not entitled to copyright protection under

the Copyright Act, and that, as a matter of law, GardenDance's torch could not be infringed. July 28 Order

at pp. 6-8.

On August 15, 2005, Plaintiff filed the present Motion for (1) an Award of Prevailing Party

Attorney's Fees Pursuant to 17 U.S.C. § 505 and (2) an Order of Sanctions Against Defendants and their

Counsel.

III. DISCUSSION

In its motion, Plaintiff argues that it is entitled to recover its reasonable attorney's fees incurred in

this case because it achieved all of the benefits it hoped to achieve in this action, and because Plaintiff's

pursuit of such relief furthers the goals of the Copyright Act. Plaintiff further argues that it is entitled to

sanctions against Defendants and their attorneys of record for their failure to have any evidentiary or legal

basis to assert numerous counterclaims against it, alleging that Defendants and their counsel failed to

perform a reasonable investigation into the truthfulness or adequacy of the facts underlying the

counterclaims asserted against it. Plaintiff contends that Defendants and their counsel acted in bad faith,

and that the counterclaims were brought for the sole purpose of harassing it and to unreasonably multiply

the proceedings.

In response, Defendants' counsel, Joel D. Joseph, argues that the failure to file "a" counterclaim

would have constituted malpractice because its registered copyright is presumed to be valid. Mr. Joseph

further argues that counsel did not act vexatiously; rather, he was justified in filing "a" counterclaim to

protect the rights of his clients. Finally, Mr. Joseph argues that he was never given notice that the drafting

of "the" counterclaim was sanctionable.

As Plaintiff's motion seeks prevailing party attorney's fees and a separate order for sanctions, the

Court shall address each request in turn.

///

A. Plaintiff's Motion for Prevailing Party Attorney's Fees

1. Legal Standard

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 3 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 4

Under 17 U.S.C. § 505, district courts have judicial discretion to grant attorney fees to the

prevailing party in a copyright action. Fogerty v. Fantasty, Inc., 510 U.S. 517, 533 (1994). However,

there is no exact formula for how courts should exercise this discretion. Id. at 527-33. Courts must make

their determinations based on equitable circumstances. Perfect 10, Inc. v. Visa International Service

Assoc., 2005 WL 2007932 at *2 (N.D. Cal. 2005). Ultimately, when courts grant attorney fees, they

must support their decisions by analyzing facts such as "the degree of success obtained, frivolousness,

motivation, objective unreasonableness of both the legal and the factual arguments, the need to advance

considerations of compensation and deterrence, and the purpose of the Copyright Act itself." Jackson v.

Axton, 25 F.3d 884, 890 (9th Cir. 1994). These factors should be applied when they are consistent with

the purpose of the Copyright Act, which is not merely to discourage copyright infringement. Fantasy, Inc.

v. Fogerty, 94 F.3d 553, 558 (9th Cir. 1996). "The policies served by the Copyright Act are more

complex, more measured, than simply maximizing the number of meritorious suits for copyright

infringement." Id. at 559. Further, not all factors must be met in order to support an award of attorney's

fees. Id. at 558. 

 In Fogerty, the Supreme Court instructed that, for purposes of determining the amount of attorney

fees to be awarded under the Copyright Act, the equitable discretion of the court should be guided by the

considerations identified in Hensley v. Eckerhart, 461 U.S. 424, 436-37 (1983). Fogerty, 510 U.S. at

534. In Hensley, the Court approved the lodestar method for calculating fees in civil rights litigation:

multiplying the number of hours reasonably expended on the litigation by the reasonable hourly rate.

Hensley, 461 U.S. at 433. The Ninth Circuit has further clarified the inquiry the Court is to conduct: "[t]he

prevailing market rate is indicative of a reasonable hourly rate. The fee applicant has the burden of

producing satisfactory evidence, in addition to the affidavits of its counsel, that the requested rates are in line

with those prevailing in the community for similar services of lawyers of reasonably comparable skill and

reputation." Jordan v. Multnomah County, 815 F.2d 1258, 1262-63 (9th Cir.1987) (citing Blum v.

Stenson, 465 U.S. 886 (1984)).

Once calculated, the lodestar rate may be adjusted "to account for other factors not subsumed

within it." Ferland v. Conrad Credit Corp., 244 F.3d 1145, 1149 n. 4 (9th Cir. 2001). Those other

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 4 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 5

factors include the preclusion of other employment, the customary fee, time limits imposed on the attorney

by the client or other circumstances, the undesirability of the case, the nature and length of the professional

relationship between client and attorney, and the awards allowed in similar cases. Morales v. City of San

Rafael, 96 F.3d 359, 363 n. 9 (9th Cir. 1996).

2. Application to the case at bar

Here, Plaintiff's success is complete and unquestioned. First, Plaintiff has succeeded not only in

having Defendants' copyright infringement counterclaim dismissed, it has also succeeded in having the

copyright in GardenDance's torch declared invalid. See July 27, 2005 Order. The Court also notes that

Plaintiff's success was based on the merits of its invalidity defense, rather than on a technical defense. 

Fantasy, Inc., 94 F.3d at 556 (court awarded attorney's fees under 17 U.S.C. § 505 in part because

defendant "prevailed on the merits rather than on a technical defense"). 

Second, Plaintiff's claims cannot be characterized as frivolous, but were brought in response to a

demand letter from GardenDance that Plaintiff cease selling "infringing torches."

Third, Plaintiff's success furthers the policies of the Copyright Act "every bit as much as a successful

prosecution of [the] infringement claim by" GardenDance would have. Fogerty, 510 U.S. at 527. The

primary objective of the Copyright Act is not only to deter infringement, but also to promote public access

to non-protected works. Id. "To that end, [parties] who seek to advance a variety of meritorious

copyright defenses should be encouraged to litigate to the same extent that [copyright owners] are

encouraged to litigate meritorious claims of infringement." Id. Plaintiff's successful invalidation of

GardenDance's copyright furthers this policy because it prevented GardenDance from keeping the merely

functional features of its outdoor torch out of the public domain. Plaintiff has demonstrated that

GardenDance's torch is a useful article with merely functional, rather than artistic, attributes, thereby

promoting the Copyright Act's policy of excluding from copyright protection the mechanical or utilitarian

aspects of a particular work. See 17 U.S.C. § 101.

Finally, an award of Plaintiff's attorney's fees will not impose too great or inequitable a burden on

Defendants. GardenDance has admitted that it has sold at least 55,000 of its GardenDance Torches

throughout the United States. Hollander Decl. Ex. C, p. 3. Moreover, the GardenDance Torch is only one

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 5 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 6

of the numerous torches and other outdoor items sold nationally by GardenDance. Id. Ex. S. Presumably,

GardenDance is not an impecunious party as it has been represented by counsel throughout this litigation, as

well as in other litigations relating to the same copyright. Id. Ex. T. Accordingly, the Court finds an award

of attorney fees appropriate.

The Court must now determine the amount of the fee award. Plaintiff seeks $97,674.60 as the

prevailing party in this action, as well as $16,774.29 in connection with the prevailing party portion of the

present motion. The requested fee amount is solely for the copyright portion of this action. Plaintiff

summarizes the work performed by its counsel as follows:

Pre-suit Investigation: Counsel conferred with Smith & Hawken

regarding the allegations of copyright infringement made by GardenDance

and investigated the history of the Smith & Hawken/GardenDance

relationship. Counsel also examined the GardenDance Torch, the allegedly

infringing Smith & Hawken Torch, and third party torches. Counsel

investigated third party cases in which GardenDance had made claims of

infringement. Counsel also researched the possible defenses to a claim of

copyright infringement.

Complaint: Based on counsel's legal research, counsel prepared

and filed the Complaint and Amended Complaint herein, seeking a

declaration of non-infringement on the basis that GardenDance's torch was

not copyrightable. Counsel also answered the copyright infringement

counterclaim filed by GardenDance.

Case Management Conference: Counsel prepared the required

Joint Case Management Conference Statement pursuant to Fed. R. Civ. P.

26 in conjunction with GardenDance's counsel. Moreover, due to

GardenDance's counsel's failure to attand a telephonic case management

conference (for which the Court issued an Order to Show Cause why

sanctions should not be entered against counsel), Smith & Hawken's

counsel was required to attend a case management conference in person. 

Counsel also communicated with GardenDance's counsel as needed.

Discovery: The parties communicated regarding Initial Disclosures

and other discovery matters and prepared and exchanged Initial Disclosure

Statements.

Early Neutral Evaluation: The parties agreed to conduct an Early

Neutral Evaluation session, for which there were numerous communications

and telephonic conferences among the parties and the assigned neutral to

determine the date and the scope of the session.

Summary Judgment: Counsel prepared and filed its summary

judgment motion on the copyright issue, which [the District] Court granted.

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 6 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 7

Motion for Prevailing Party Fees: Based on the summary judgment

in favor of Smith & Hawken invalidating the copyright in the GardenDance

Torch, counsel has prepared the instant motion. 

Pl.'s Mot. for an Award of Prevailing Party Attorney's Fees, 17:13-18:12.

Plaintiff also provides the following summary of hours worked and hourly rates:

Timekeeper Hours worked 2004 Hourly Rate 2005 Hourly Rate

Susan Hollander 36.9 $450 x 8.8 $504 x 28.1

Laura Franco 124.4 $306 x 13.8 $369 x 110.6

Jennifer Golinveaux 22.5 $306 x 22.5 N/A

Ryan Hilbert 79.9 $279 x 34 $319.50 x 45.9

Allen Lee 11.3 $229.50 x 3.5 $265 x 7.8

Paralegals 14.8 $76.50 - $108 x 5 $90 - $189 x 9.2

Imaging & Litigation

Support

14.4 $81 $81

On December 15, 2005, Plaintiff provided the following calculations in connection concluding the

prevailing party portion of the present motion:

Timekeeper Year Hours x Rate Total

Susan Hollander 2005 7.85 x $504 $3956.40

Laura Franco 2005 34.55 x $369 $12,748.95

Giselle Darwish 2005 1.5 x $117 $175.50

Uyen Vu 2005 8.65 x $144 $1245.60

Donna Wishon 2005 1.7 x $189 $190.35

Imaging & Litigation

Support

2005 2.35 x $81 $190.35

Subtotal $18,638.10

Total (with 10% discount) = $16,774.29

The Court has reviewed Plaintiff's submissions and finds the rates and amount of time reasonable. 

Plaintiff provides several reasons to support this decision. First, the rates charged are consistent with the

reputation and experience of the attorneys and professionals who performed the services. Manatt, Phelps

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 7 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 8

& Phillips, LLP is an AV-rated firm in the Martindale-Hubbell listing. Hollander Decl. ¶ 27. Further, the

individual attorneys involved in this case have experience in intellectual property and copyright infringement

actions of the type prosecuted here consistent with the rates they charged. Id. at ¶¶ 28, 30.

Second, the rates charged are consistent with the results achieved - Plaintiff's counsel achieved

summary judgment invalidating the copyright in GardenDance's torch and was able to do so without

protracted discovery.

Third, the rates charged are consistent with the rates customarily charged for work performed by

comparable law firms in California. Plaintiff provides the following examples from a December 2004

National Law Journal survey of hourly billing rates:

• Cooley Godward charges from $376-$700 for partners and $205-$550 for associates

• Thelen, Reid & Priest charges $350-$650 for partners and $175-$425 for associates

• Loeb & Loeb charges $350-$725 for partners and $185-$375 for associations

• Gray, Cary, Ware & Freidenrich charges $310-$695 for partners and $215-$495 for associates

Hollander Decl. Ex. Q. Based on this survey, the Court finds Manatt's rates are commensurate with those

charged by comparable firms in California.

Fourth, the rates charged are consistent with the complexity of the work involved, given that courts

recognize that "copyright law and issues of infringement are specialized areas of law, requiring specialists in

the field." Fantasy, Inc. v. Fogerty, 1995 WL 261504 at *4 (N.D. Cal. 1995).

Finally, Manatt provided Plaintiff a 10% discount off of the total fees and costs due to Plaintiff's

long-standing relationship with the firm. Hollander Decl. ¶ 24. Accordingly, the Court finds Plaintiff's

request to be reasonable and RECOMMENDS that the District Court GRANT $106,948.89 in attorney

fees.

///

///

B. Plaintiff's Motion for Sanctions

1. Legal Standard

28 U.S.C. § 1927 provides in relevant part that "[a]ny attorney . . . who so multiplies the

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 8 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 9

proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the

excess costs, expenses, and attorney's fees reasonably incurred because of such conduct." By its plain

language, this provision applies to "unnecessary filings and tactics once a lawsuit has begun." Pacific

Harbor Capital, Inc. v. Carnival Airlines, Inc., 210 F.3d 1112, 1118 (9th Cir. 2000). Section 1927

does not authorize sanctions from a party, but only from an attorney or otherwise admitted representative of

a party. Federal Trade Commission v. Alaska Landleasing, Inc., 799 F.2d 507, 510 (9th Cir. 1986).

Sanctions under Section 1927 must be supported by a finding of subjective bad faith. In re

Keegan Mgmt. Co. Sec. Lit., 78 F.3d 431, 436 (9th Cir. 1996). Bad faith for purposes of Section 1927

is present when an attorney knowingly or recklessly raises a frivolous argument. Pacific Harbor, 210 F.3d

at 1118. Thus, the frivolousness of a claim or argument does not by itself justify an award of sanctions

under Section 1927; the additional element of wrongful purpose is required. Cinquini v. Donahoe, 1996

WL 79822 *8 (N.D.Cal. 1996). Ignorance, negligence, incompetence, or even a basic lack of professional

courtesy do not constitute "bad faith." Cruz v. Savage, 896 F.2d 626, 630 (1st Cir. 1990).

Plaintiff also seeks sanctions under the District Court's inherent power. The Ninth Circuit provides

that sanctions pursuant to a court's inherent powers "are available if the court specifically finds bad faith or

conduct tantamount to bad faith." B.K.B. v. Maui Police Dep't, 276 F.3d 1091, 1108 (9th Cir. 2002). 

"[A] finding of bad faith does not require that the legal and factual basis for the action prove totally

frivolous; where a litigant is substantially motivated by vindictiveness, obduracy, or mala fides, the assertion

of a colorable claim will not bar the assessment of attorney's fees." Id. at 992. 

///

///

2. Application to the case at bar

Here, Plaintiff argues that sanctions are appropriate because Defendants asserted numerous

counterclaims which had no basis in law or fact, but which were meant solely to harass Plaintiff. Plaintiff

directs the Court's attention to the following allegations:

• Plaintiff copied the design of its outdoor garden torches and

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 9 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 10

subsequently had inferior copies made in China. Hollander Decl.

Ex. C, ¶¶ 5, 21.

• Plaintiff has the infringing torches made for it in China by workers

who are not paid decent wages, workers who live under slave-like

conditions, by employees of the People's Liberation Army and by

prison workers. Id. at ¶ 7.

• Plaintiff stole various copyright and/or trade dress rights from other

competitors. Id. at ¶¶ 31-33.

Plaintiff argues that none of these allegations were made on information and belief, nor were they

verified, and that Defendants have never filed any declaration or other document indicating that the facts

upon which they relied in asserting those counterclaims were believed to be true, or that their counsel had

undertaken even a minimal investigation into the truthfulness of the allegations. Plaintiff also contends that

Judge Armstrong, in granting Plaintiff's first motion to dismiss, ordered Defendants to file amended

counterclaims, and that Defendants failed to comply with this order, stating that they "may never do so." Id.

at Ex. H, p. 1. 

In response, Defendants argue that it was Plaintiff that filed this action and that failure to file "a"

counterclaim would constituted malpractice. Defendants state that GardenDance has a federal registered

copyright which is presumed valid and they had every right to rely on the validity of that copyright. 

Defendants further argue that Mr. Joseph did not intend to harass Plaintiff; rather, he was seeking to

represent the copyright holder's interest. Finally, Defendants argue that they were never given notice that

the drafting of "the" counterclaim was sanctionable.

Upon review of the parties' arguments, the Court finds sanctions inappropriate in this matter. 

Despite Plaintiff's complaints about Defendants' counsel, the Court finds that Plaintiff has demonstrated - at

best - only that Defendants' counsel acted with poor judgment or incompetently. First, the Court notes that

GardenDance, in order to protect its copyright, filed its infringement counterclaim in response to Plaintiff's

request for declaratory relief. Despite the fact that the District Court later declared its copyright invalid, at

least one of GardenDance's Counterclaims appears to have been filed in good faith. Accordingly, the

Court need only concern itself with Counterclaims Two through Six: violations of Section 43(a) of the

Lanham Act (trade dress infringement) (count 2); unfair competition (count 3); civil RICO claims (counts 4

and 5): and a request for declaratory and injunctive relief (count 6).

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 10 of 11
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 11

There is no evidence, however, that Defendants' counsel acted with an improper purpose or with

bad faith. Although Plaintiff identifies instances of poor judgment, some of which could rise to the level of

sanctionable conduct, the Court does not find that Defendants or their counsel acted with subjective bad

faith in this lawsuit. In his declaration, Mr. Joseph certifies that all the allegations and factual contentions in

the counterclaims have evidentiary support. Decl of Joel Joseph at ¶3. Moreover, although Plaintiff argues

that Judge Armstrong ordered Defendants to file amended counterclaims, the November 5 Order provides

only that Judges Armstrong granted leave to file amended counterclaims, not that she ordered Defendants

to file them. An award of sanctions under 28 U.S.C. § 1927 is therefore inappropriate and the Court

hereby RECOMMENDS that the District Court DENY Plaintiff's motion for sanctions.

IV. CONCLUSION

Based on the foregoing analysis, the Court hereby RECOMMENDS that the District Court

GRANT Plaintiff's motion for attorney's fees in the amount of $106,948.89 and DENY Plaintiff's motion

for sanctions.

IT IS SO RECOMMENDED.

Dated: December 19, 2005 

MARIA-ELENA JAMES

United States Magistrate Judge

Case 4:04-cv-01664-SBA Document 109 Filed 12/19/05 Page 11 of 11