Intex also asserts that Plaintiffs should not be entitled to attorneys’ fees for third-party
discovery subpoenaed by Plaintiffs from Underwriters Laboratories because it was unnecessary,
as it sought information regarding the electronics in the mattress pump, and overly broad, as it
related to waterbeds and bedroom furniture not involved in the litigation. However, Plaintiffs
subpoenaed these documents from Underwriters Laboratories after Intex claimed it did not have
any relevant documents in this regard. Although Intex claims these documents were irrelevant,
Plaintiffs, in discovery, are entitled to any information “reasonably calculated to lead to the
discovery of admissible evidence.” Fed. R. Civ. P. 26(b)(1). Plaintiffs’ attorneys acted
reasonably in this regard.

Intex further contends that Plaintiffs unnecessarily briefed a number of motions for
judgment as a matter of law, as these motions were rendered moot after the jury entered a verdict
in favor of Plaintiffs on February 25, 2004. Intex contests the time Plaintiffs’ attorneys spent
working on briefs which were all filed after the jury rendered its verdict.

Because the motions were mooted by the jury verdict, Plaintiffs unnecessarily filed these
additional briefs after the verdict and may not be awarded fees for their preparation. Moreover,
Plaintiffs’ time sheets do not disclose the amount of time spent preparing the briefs; and,
therefore, it cannot be determined how much time Plaintiffs expended. Therefore, Plaintiffs may
not recover their fees for March 2004, valued at $89,645.45. See Lam, 718 F.2d at 1068-69. The
May 2004 brief, though, was only two pages long. Because of the extremely short nature of this
brief and the large deduction of March 2004 fees, a further reduction of fees for the May 2004

brief would be inappropriate.


attorneys; (2) the technology involved was simple and not complex; and (3) the amount of
attorney’s fees sought by Plaintiffs, $2,217,356.93, represents too high of a percentage —

32 percent — of the actual recovery of $6,900,000.00. However, the calculation of the time and
labor expended by Plaintiffs’ attorneys is not relevant to the determination of the reasonableness
of the hourly rate. While the technology involved may be relatively simple, the patent issues
raised by the parties were complex. Intex argues that only 25 percent of the recovery award
should be awarded, but Intex raised a number of unnecessary issues into the case. For example,
Intex disclosed it would assert the defenses of invalidity at trial but abruptly abandoned this
defense during the trial. This type of conduct increased the time required by Plaintiffs’ attorneys
in trial preparation and, therefore, needlessly increased the attorneys’ fees.

The presentation of evidence on complicated issues by Plaintiffs’ attorneys was done in a
manner that was clear and understandable for the jury. In particular, in this regard, was
Plaintiffs’ attorneys’ conduct of the direct examination of Plaintiffs’ expert, Dr. Albert Karvelis.
The high level of Plaintiffs’ attorneys’ trial practice skills was a significant factor in achieving a
favorable result for the Plaintiffs.

Intex next argues that Plaintiffs should not be compensated for two specific motions filed
by the Plaintiffs’ attorneys because they were unnecessary. These two motions involved United
States Patent No. 5,267,363 (“the ‘363 patent”). The ‘363 patent was not an issue in the jury trial
because Intex was granted summary judgment on claims involving this patent. It was Intex who
raised the issue of the ‘363 patent; Plaintiffs’ attorneys’ conduct in defending these claims was

reasonable.


Intex also argues that Plaintiffs’ attorneys excessively staffed the case by: (1) having two
attorneys present at each deposition; (2) having all four trial attorneys attend the pretrial
conference; and (3) having four attorneys present at the trial. Intex also challenges the hours
billed by Attorney Chu.

Recovering fees for having multiple attorneys present at a deposition is permissible under
35 U.S.C. § 285. Vardon Golf Co. v. Karsten Mfg. Corp., No. 99 C 2785, 2003 WL 172006, at
*4 (N.D. Ill. Mar. 31, 2003). Having all trial attorneys attend the pretrial conference is also
reasonable to insure all trial attorneys understand the Court’s trial procedure and the have the
opportunity to raise any specific issues with the Court at that time. Having four attorneys present
at the trial was also reasonable, based on the number, nature, and complexity of the issues
concerning the validity of the patent, whether Intex’s device infringed the ‘726 patent, and
damages. Intex had four attorneys present at the trial, as well.

Regarding the participation of Chu, Intex contends that he was only minimally involved
at trial yet billed 1,164.5 hours on this matter. Chu was the attorney responsible for preparing for
Intex’s invalidity defenses. Intex, at the pretrial conference, stated that it expected the trial to last
twelve to fifteen days and that Intex intended to raise a number of defenses, including an
invalidity defense. During opening statements, Intex also stated that it would present invalidity
defenses. However, as mentioned above, at trial, Intex abruptly abandoned these defenses during
the first few days of trial. Instead of the twelve days represented by Intex, the trial, including jury
deliberations, took six days. Chu’s preparation regarding the anticipated invalidity defenses was
reasonable based on Intex’s pretrial and early trial assertions that these later-abandoned issues

were going to be litigated. Accordingly, the hours billed by Chu are reasonable.


UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

AERO PRODUCTS INTERNATIONAL, INC.,
a Florida corporation, and
ROBERT B. CHAFFEE, an individual,
Plaintiffs,
v. No: 02 C 2590
INTEX RECREATION CORPORATION, Judge John W. Darrah

a California corporation;
QUALITY TRADING, INC.,
a California corporation; and
WAL-MART STORES, INC.,
a Delaware corporation,

weve enerververwv ee Se SS Se

Defendants.

MEMORANDUM OPINION AND ORDER

The Plaintiffs, Aero Products International, Inc. (“Aero”) and Robert B. Chaffee, filed
suit against the Defendants, Intex Recreation Corporation (“Intex”); Quality Trading, Inc.; and
Wal-Mart Stores, Inc. A trial by jury was held; and Defendants were found to have willfully
infringed Plaintiffs’ patent, United States Patent No. 5,367,726 (“the ‘726 patent”), for a valve
used in an inflatable air mattress and for violating Plaintiffs’ trademark. The jury awarded
Plaintiffs $2,950,000.00 in patent damages and $1,000,000.00 in trademark damages.

In a written opinion, Plaintiffs were also awarded double patent damages, pursuant to
35 U.S.C. § 284, and attorneys’ fees, pursuant to 35 U.S.C. § 285. Aero Prods. Int'l v. Intex
Recreation Corp., No. 02 C 2590, 2004 WL 1696749 (N.D. Ill. July 15, 2004), The parties were

directed, pursuant to Local Rule 54.3, to submit petitions for attorneys’ fees. The parties have


Lastly, Intex objects to a number of expenses Plaintiffs seek: (1) $41,021.56 in copying
charges; (2) $584.00 in taxi-cab costs; and (3) $4,356.69 for food and meals obtained throughout
the case. Plaintiffs have not properly documented the necessity for these copying charges, the
number of copies made, or the costs per copy and may not recover these expenses. See
Hensley v. Eckerhart, 461 U.S. 424, 443 (1983) (“Where documentation is inadequate, the
district court may reduce the award accordingly.”). Plaintiffs have also failed to explain why the
taxi-cab and food expenses are reasonable. Therefore, Plaintiffs’ award of expenses will be
reduced by $45,962.25.

CONCLUSION
For the foregoing reasons, Plaintiffs are awarded $2,127,771.48 in attomeys’ fees and

$110,555.18 in expenses.

sas Lob Va

im W. DARRAH
it States District Judge



done so, and presently before the Court is the Joint Statement Regarding Attorney’s Fees and
Expenses. Plaintiffs seek attorneys’ fees totaling $2,217,356.93 and expenses totaling
$156,617.43. Intex stipulates that Plaintiffs are entitled to $1,668,398.70 in attorneys’ fees and
does not dispute that Plaintiffs may recover $110,555.18 in expenses.

After conferring, the parties have the following disputes: (1) the appropriate hourly rate
for Plaintiffs’ attorneys; (2) whether Plaintiffs should be compensated for work relating to its
motion to dismiss Intex’s Second and Third Counterclaims; (3) whether Plaintiffs should be
compensated for time incurred relating to Intex’s motion for summary judgment concerning
another patent that was not the subject of the jury trial; (4) whether Plaintiffs should be
compensated for time spent on third-party discovery of Underwriters Laboratories; (5) whether
Plaintiffs should be compensated as to any time incurred after the jury verdict was returned for
motions for judgment as a matter of law that were later determined to be moot; (6) whether
Plaintiffs appropriately staffed depositions, the pretrial conference, and trial; (7) the
appropriateness of certain disbursements Plaintiffs are seeking.

In determining the amount of fees to award pursuant to 35 U.S.C. § 285, “there must be
some evidence to support the reasonableness of, inter alia, the billing rate charged and the
number of hours expended.” Lam, Inc. v. Johns-Manville Corp., 718 F.2d 1056, 1068 (Fed. Cir.
1983) (Lam). Expenses may also be included in awarding fees under § 285. Central Soya Co. v.
Geo. A. Hormel & Co., 723 F.2d 1573, 1578 (Fed. Cir. 1983). The decision of the proper amount
of fees is within the discretion of the district court. Lam, 718 F.3d at 1069.

Plaintiffs seek the following hourly rates for their four principal attorneys on the case,

William Frankel, Michael Chu, Mark Remus and David Bluestone: (1) in 2002, $405.00,


$320.00, $250.00, and $215.00, respectively; (2) in 2003, after factoring in a 7.33 percent
discount, $403.00, $320.00, $260.00, and $222.00, respectively; and (3) in 2004, $460.00,
$370.00, $320.00, and $280.00, respectively. Frankel is a partner who started working in 1980;
Chu is an attorney who started working in 1992; Remus is an attorney who started working in
1997; and Bluestone is an attorney who started working in 1999.

Intex argues that the hourly billing rate should be reduced because: (1) the rates charged
by Intex are higher than the median billing rates in the American Intellectual Properly Law
Association’s (“AIPLA”) 2002-03 hourly billing survey; (2) those rates are higher than the rates
charged by Intex’s local counsel; and (3) of additional factors, as enumerated in Johnson v.
Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (Sth Cir. 1974) (Johnson).

While the rates charged by Plaintiff's counsel in 2002-03 are higher than the median
amount of the AIPLA survey, those rates, except for Frankel, are all within the seventy-fifth
percentile of the AIPLA survey for attorneys with similar experience; Frankel’s rates only exceed
the seventy-fifth percentile amount for partners with similar experience by $7.00 in 2002 and
$5.00 in 2003. Further, an independent survey which examined the hourly billing rates of thirty
large intellectual property law firms in 2004 disclosed Plaintiffs’ attorneys’ hourly rates were
below the median.

Intex also argues that Plaintiffs’ attorneys’ rates are higher than the rates charged by
Intex’s local counsel. However, Plaintiffs’ attorneys are permitted to set their own rates and may
recover those rates provided that they are reasonable.

Intex further contends that three factors, as enumerated in Johnson, 488 F.2d 717-19,

compel a reduction of the hourly rates: (1) too much time and labor was expended by Plaintiffs’