9/22/04 NA 5.75 $690.00 | Research
9/23/04 CA 51 $68.85 | Researched
9/23/04 NA 7.75 $930.00 | Research issue
9/27/04 NA 8.00 $960.00 | Write memo
7107/04 SCs 1.75 $831.25 | Confs

7/16/04 SCS 1.00 $475.00 | Confs

8/02/04 SCS 1.00 $475.00 | Attn to issues
10/05/04 | RIK 3.00 $870.00 | Legal research
10/07/04. | CA 10 $13.50 | Met

10/07/04 | NA 6.00 $720.00 | Research
10/08/04 | JB 5.00 $1175.00

10/11/04 | NA 1.75 $210.00 | Research issue
10/12/04 KP 2.50 $387.50

10/12/04 | JAC 2.00 $310.00 | Legal research
10/12/04 | NA 6.25 $750.00 | Research issue
10/13/04 | KP 1.50 $232.50

10/13/04 | JAC 3.30 $511.50 | Legal research
10/13/04 | NA 5.50 $660.00 | Research issue
10/14/04 | NA 25 $30.00 | Research issue
10/14/04 | NA 1.25 $150.00 | Research
10/15/04 | KP 3.50 $542.50

10/15/04 JAC 25 $38.75

10/15/04. | NA 7.50 $900.00 | Research
10/15/04 | TMR 25 $35.00 | Proof read
10/20/04 JJH 3.50 $1470.00 | Study
10/21/04 | JJH 1.00 $420.00 | Review



Liquid Dynamics calculates its attorney’s fees as:

Attorney/Biller Avg. Rate Hours Total
Steven C. Schroer $467.68 388.60 $181,739.00
Mark W. Hetzler $336.85 2090.07 $704,048.70
Jon A. Birmingham $207.93 1957.25 $406,973.75
Other Partners $322.44 268.35 $86,526.25
Other Associates and Law Clerks $130.59 716.58 $93,578.60
Paralegals and Other Support $101.95 1398.57 $142,589.00
Total: $1,615,455.30

Vaughan argues the requested $1,615,455.30 must be reduced by $691,799.80: (1)
$236,167.60 for fees charged by non-lawyers; (2) $253,632.20 for inadequate billing descriptions;
and (3) $202,000 for excessive staffing of litigators.

1. Reasonableness of Hourly Rates

Liquid Dynamics bears the burden of proving that “the requested rates are in line with those
prevailing in the community for similar services of lawyers of reasonably comparable skill and
reputation.” View Eng., Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 987 (Fed. Cir. 2000)
(citations omitted). Accordingly, Liquid Dynamics compares its attorneys’ average rates with the
surveyed rates for Chicago intellectual property attorneys reflected in the American Intellectual
Property Association (“AIPLA”) 2003 survey. The AIPLA survey has been used by other courts in
determining the reasonableness of hourly rates. See e.g., View, 208 F.3d at 987; Mathis v. Spears,
857 F.2d 749, 755-56 (Fed. Cir. 1988); Howes v. Medical Components, Inc., 761 F. Supp. 1193,
1196-97 (E.D. Pa. 1990). Liquid Dynamics’ three principal attorneys were Steven C. Schroer, Mark

W. Hetzler and Jon A. Birmingham. All attorneys practice at the Fitch, Even, Tabin & Flannery law


abused the judicial process. See e.g., Vardon, 2003 U.S. Dist. LEXIS 5072, at *24. The request for
expert witness fees is denied.

B. Costs

Section 285 permits recovery of expenses reasonably incurred in the litigation. See e.g.,
Central Soya, 723 F.2d at 1578. Liquid Dynamics seeks: (1) $81,490.10 for copies; (2) $4278.94
for postage and courier expenses; (3) $17,655.73 for Lexis and other database research expenses; (4)
$9642.20 for travel expenses; (5) $14,791.15 for court reporters and videographers; and (6)
$15,262.59 for miscellaneous costs.

Other than the generalized, blanket statements in its brief regarding the reasonableness of the
entire fee request, Liquid Dynamics does not provide support showing the requested costs are
reasonable. For example, Liquid Dynamics submits a voluminous exhibit of invoices, but no
explanation as to why travel costs were reasonable or even identification of “miscellaneous” costs.
See Mot. at Ex. 31. Nor does Liquid Dynamics identify which invoices pertain to specific costs. In
addition, some of the documentation is illegible. In any event, the court previously awarded Liquid
Dynamics $8268.21 for court reporter fees and $27,655.41 for exemplification and copying costs
under § 1920. Liquid Dynamics fails to establish that additional costs should be awarded.

IV. 28 U.S.C. § 1927

Asan additional basis for fees, Liquid Dynamics contends Vaughan’s litigation misconduct
multiplied the proceedings under 28 U.S.C. § 1927. Section 1927 provides an attorney who
multiplies proceedings unreasonably and vexatiously may be required by the court to personally
satisfy the excess costs, expenses and attorney’s fees reasonably incurred because of misconduct.

“To be liable under section 1927, counsel must have engaged in serious and studied disregard for

18


4/10/02 NTP -50 $55.00 | Meet and begin research

5/03/02 JM 3.00 $300.00 | Working on several small projects for
JAB

5/15/02 KP 5.00 $600.00 | Research

5/19/02 JB 5.75 $1150.00 | Prepare

5/20/02 KP 6.00 $720.00 | Research

5/21/02 JM 3.00 $300.00 | Attend to several projects for JAB

5/21/02 KP 3.00 $360.00 | Research

5/22/02 JM 2.00 $200.00 | Attend to several projects for JAB

$/29/02 JAC 2.00 $240.00 | Legal research

5/30/02 JAC 1.00 $120.00 | Continued legal research

5/31/02 JM 1.00 $100.00 | Various projects, refile folders

$/29/02 SG 4.00 $400.00 | Case research

5/30/02 SG 3.50 $420.00 | Case research

6/05/02 KP 50 $60.00 | Research

6/05/02 JAC .75 $90.00 | Legal research

6/06/02 KP 4.50 $540.00 | Research

6/06/02 JAC 2.75 $330.00 | Continue research

6/06/02 JAC 50 $60.00 | Legal research

6/07/02 KP 4.00 $480.00 | Research

6/10/02 SG 5.00 $600.00 | Research case law

6/10/02 JAC 3.00 $360.00 | Legal research

6/12/02 KP 3.00 $360.00 | Research

6/13/02 SG 2.00 $240.00 | Research

6/14/02 JJH .25 $100.00 | Review of materials

6/14/02 BJL 2.50 $250.00 | Research

10



Dist. LEXIS 5072, at *14 (N.D. Ill. Mar. 31, 2003). Many individuals worked on Liquid Dynamics’
behalf. However, the billing records reflect Schroer, Hetzler and Birmingham handled the majority
of the work. Vaughan does not dispute that each party’s litigation team consisted primarily of two
partners, one associate and three paralegals. Vaughan contends Liquid Dynamics’ expenditures
exceeded Vaughan’s by more than 36%. However, Vaughan fails to show that the difference in
expenditures is unreasonable. See id. at *7 (prevailing party received almost all of its requested
8966.65 hours even where non-prevailing party spent 3153.82 hours). Accordingly, Vaughan’s
objections to Liquid Dynamics’ staffing of the case are rejected.

Vaughan also objects to Liquid Dynamics’ request for fees charged by non-lawyers.
Attorney’s fees under § 285 include expenditures the prevailing party incurs in preparation for and
performance of legal services related to the suit. See e.g., Central Soya Co., Inc. v. Geo. A. Hormel
& Co., 723 F.2d 1573, 1578 (Fed. Cir. 1983). Fees under § 285 may include time charged by non-
legal personnel and paralegal personnel. See id., citing Codex Corp. v. Milgo Electronic Corp., 541
F. Supp. 1198, 1201 (D. Mass. 1982). However, secretarial tasks are generally considered overhead
costs that are unrecoverable as attorney’s fees. See e.g., Roe v. Chicago, 586 F. Supp. 513, 516
(NLD. IIL 1984); see also, Burnley v. City of San Antonio, No. SA-02-CA-0489 NN, 2004 US, Dist.
LEXIS 21565, *11-13 (W.D. Tex. Sept. 15,2004). Liquid Dynamics seeks $5197.50 for secretarial
overtime; its billing invoices reflect charges for secretarial “document supervision.” These fees are
inappropriate. The fees request is reduced by $5197.50.

3. Adequacy of Billing Descriptions

Liquid Dynamics attaches copies of billing invoices to support its motion. Mot. at Ex, 29.

Vaughan contends many of the invoice entries lack sufficient description to enable a determination


firm. Schroer and Hetzler are firm partners. A comparison of the attorneys’ average rates with the

AIPLA study reflects:

Attorney Experience Rate Range Average AIPLA AIPLA
(2001-2004) Rate Survey Survey
(median) (75th
percentile)
Schroer 30-34 years $415-475 $467.68 $370 $450
Hetzler 10-14 years $300-360 $336.85 $300 $350
Birmingham <5 years $185-235 $207.93 $196 $230

Vaughan does not seriously contest the reasonableness of the attorneys’ rates. Indeed, Hetzler’s
average rate of $336.85 is comparable to Vaughan attorney Robert Carlson’s $359.29 rate.
Birmingham’ s $207.93 average rate is comparable to Vaughan attorney Mark Walters’ $230.16 rate.
Schroer’s average rate is higher than the Vaughan’s attorneys’ rates, and slightly higher than the
AIPLA 75th percentile range, but it is not unreasonable. The AIPLA survey was based on results
through May 26, 2003. It is reasonable to infer that litigation fees have increased since the survey’s
completion. Liquid Dynamics’ hourly rates are reasonable.

2. Number of Litigators and Charges by Non-Lawyers

Vaughan complains Liquid Dynamics excessively used an army of litigators, secretaries,
paralegals and law clerks in the litigation, resulting in an outrageous fee request that is $600,000
more than the jury’s damages award. Preliminarily, the fact that the fee request exceeds the jury’s
verdict is not atypical in a patent case, and Vaughan provides no support to suggest otherwise. Nor
does Vaughan support its argument that Liquid Dynamics inappropriately staffed the case. “Beyond
the principle of reasonableness, parties need not justify their billing practices nor their use of time

and resources in litigation.” Vardon Golf Co., Inc. v. Karsten Mfg. Corp., No. 99 C 2785, 2003 U.S.

6


the orderly process of justice,” and “it is not sufficient that the claim be found meritless; the claim
must be without a plausible legal or factual basis and lacking in justification.” Knorr Brake Corp.
v. Harbil, Inc., 738 F.2d 223, 226-27 (7th Cir. 1984) (internal citations omitted). While Vaughan
engaged in litigation misconduct, its claims were not without plausible basis. Further, the court has
taken Vaughan’s multiplication of proceedings into account by enhancing damages and finding the
case is exceptional, warranting attorney’s fees. The request for § 1927 sanctions is inappropriate
under all the circumstances.
CONCLUSION
For the foregoing reasons, Liquid Dynamics’ motion for attomey’s fees and non-taxable costs

is granted in part. Liquid Dynamics is awarded $1,501,239.80 in attorney’s fees.

May 12, 2005 ENTER:

. Conlon
United States District Judge

19


9/28/01 scs 50 $207.50 | T/confs

10/10/01 | TPM 30 $90.00 | Reviewed Vaughan

10/25/01 | SCS 25 $103.75 | Telephone conference

1/21/02 MWH 5,00 $1500.00 | Prepare outline

1/30/02 MWH 7.50 $2250.00 | Preparation letter to opposing
counsel re outstanding discovery issues

1/30/02 JB 5.50 $1017.50 | Discuss case with MWH; prepare 3
prepare 3 prepare ; telephone
conference with Mark Crump

1/31/02 MWH 7.50 $2250.00 | Preparation ; conference with J.
Birmingham and potential expert

2/12/02 NTP 1.00 $110.00 | Research

2/14/02 TPM 30 $90.00 | Attention to discovery issues

2/16/02 JB 5.00 $925.00 | Prepare

2/18/02 NV 2.67 $200.25 | Assemble materials

2/20/02 NTP 6.00 $660.00 | Research

3/06/02 NTP 3.50 $385.00 | Prepare

3/09/02 JB 3.00 $600.00 | Prepare 5 prepare 3
discuss matter with MWH; prepare

3/11/02 JB 6.00 $1200.00 | Prepare } prepare
telephone conference with Lueptow;
discuss matter with MWH

3/13/02 MJR 3.75 $375.00 | Attend documents
Vaughan produced

4/03/02 MJR 3.00 $300.00 | Research

4/03/02 NTP 1.75 $192.50 | Research

4/04/02 JB 5.50 $1100.00 | Prepare motion.

4/10/02 MIR 3.50 $350.00 | Research



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

LIQUID DYNAMICS CORPORATION,
Plaintiff, No. 01 C 6934
v. Suzanne B. Conlon, Judge

VAUGHAN COMPANY, INC.,

were eS SS

Defendant.

MEMORANDUM OPINION RDER

Liquid Dynamics Corporation (“Liquid Dynamics”) sued Vaughan Company, Inc.
(“Vaughan”) for infringement of U.S. Patent No. 5,458,414 (“the ‘414 patent”) pursuant to 35 U.S.C.
§ 271 et seg. On October 25, 2004, Liquid Dynamics received a $1,183,722.00 jury verdict in its
favor on willful infringement and invalidity claims, and on November 12, 2004, the court granted
Liquid Dynamics’ motion for judgment as a matter of law on Vaughan’s inequitable conduct
counterclaim. Liquid Dynamics was awarded prejudgment and post-judgment interest and injunctive
relief on February 22, 2005; Liquid Dynamics was also awarded $52,148.22 in costs. Dkt. No. 263.
On March 22, 2005, Liquid Dynamics was awarded enhanced damages pursuant to 35 U.S.C. § 284
in the amount of $2,367,444. Liquid Dynamics Corp. v. Vaughan Co., Inc., No. 01 C 6934, 2005
U.S. Dist. LEXIS 6162, *4-7 (N.D. Ill. Mar. 22, 2005). Liquid Dynamics now seeks $1,615,455 in
attorney’s fees, $69,427 in expert fees and $143,120 in costs pursuant to 35 U.S.C. § 285 and 28

US.C. § 1927.


4/14/03 DLP 1.00 $160.00 | Research

4/15/03 DLP 1.10 $176.00 | Research

4/24/03 JB .50 $100.00 | Legal research

1/26/04 MWH 25 $90.00

1/30/04 JB 50 $117.50 | Review

1/31/04 JB 25 $58.75 | Review

2/18/04 JAC 2.10 $325.50 | Legal research

2/19/04 JAC 1,90 $294.50 | Legal research

2/23/04 JAC 1.70 $263.50 | Legal research

3/14/04 MWH 17 $61.20

6/23/04 MWH .25 $90.00

6/30/04 MWH -50 $180.00 | Telephone conference

6/30/04 JRB 4.75 $570.00

7/09/04 JRB 35 $42.00 | Update

7/23/04 TPM 1.00 $380.00 | Conference.

7125/04 MWH 5.00 $1800.00

1127/04 TPM .75 $285.00

8/04/04 MRR 5.00 $500.00 | Research

8/10/04 RIK 8.00 $2320.00 | Legal research

8/16/04 KSD 5.00 $500.00 | Research

8/17/04 KSD 7.00 $700.00 | Research

8/18/04 MRB 5.20 $1014.00 | Legal research

8/18/04 RIK 5.00 $1450.00 | Legal research
materiality; legal research

8/18/04 KSD 7.00 $700.00 | Research research

research
8/19/04 MRB 2.50 $487.50 | Legal research

12



6/19/02 SG .75 $90.00 | Research

6/19/02 JAC 1.50 $180.00 | Legal research

6/19/02 JAC 75 $90.00 | Legal research

6/26/02 SG 1.00 $120.00 | Legal research

6/26/02 SG 4.50 $340.00 | Legal research

6/27/02 SG 1.00 $120.00 | Legal research

7108/02 SG 6.00 $720.00 | Research

7109/02 SG 3.00 $360.00 | Legal Research

7/29/02 JB 2.25 $450.00

9/11/02 MWH 75 $247.50 revise notice

9/28/02 MWH 50 $165.00 | Attendtoreviewof___ telephone
counsel re client

10/01/02. | MWH .75 $247.50 | Review____ prepare letter
forwarding same to client

11/19/02 | DLP 5.00 $800.00 | Research

11/20/02. | DLP 4.50 $720.00 discuss matter with MWH

11/22/02. | DLP 4.40 $704.00 | Research regarding

1/20/03 DLP 6.40 $1024.00 | Research

1/21/03 DLP 8.80 $1408.00 | Research discussed results of
research with Mr. Birmingham

1/25/03 JB 75, $150.00 | Legal research regarding

4/02/03 DLP 2.00 $320.00 | Research

4/03/03 DLP 2.90 $464.00 | Research__ preparation of memo

research

4/04/03 DLP 1.30 $208.00 | Research preparation of
memo

4/07/03 DLP 50 $80.00 | Research

4/11/03 DLP .90 $144.00 | Research

11



as to whether the expenditure was reasonably incurred. Vaughan also contends Liquid Dynamics
has not submitted copies of checks demonstrating that all billed fees were actually paid. “Although
the amount the client paid the attorney is one factor for the court to consider in determining a
reasonable fee, it does not establish an absolute ceiling.” Junker v. Eddings, 396 F.3d 1359, 1365
(Fed. Cir. 2005). The submission of checks that Liquid Dynamics paid to its attorneys is not
essential.

However, Liquid Dynamics heavily redacted its billing invoices. As a result, many
descriptions prevent the court from evaluating the reasonableness of some purported costs. See e.g.,
Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S. Ct. 1933 (1983) (where documentation is
inadequate district court may reduce the award); Vardon, 2003 U.S. Dist. LEXIS 5072, at *17 (not
awarding fees for vaguely described “pretrial preparation and strategy.”) “[A]ttorneys are required
to submit reasonably specific information to support the award of attorney’s fees”); see also Junker,
396 F.3d at 1366 (evidence required to determine a reasonable attorney fee includes detailed billing
records). Indeed, some requested fees do not even have a description. Further, some entries appear
unreasonably duplicative. The following challenged entries fail to meet “a fee applicant’s heavy
obligation to present well-documented claims,” see Role Models America, Inc. v. Brownlee, 353 F.3d

962, 971 (D.C. Cir. 2004), and are not awarded:

Date Attorney | Hours Cost Description
8/17/01 TPM 2.25 $675.00 | Reviewed____ and conference with
attorney Hetzler regarding _ litigation
9/25/01 MWH 2.50 $750.00 | Review legal research
9/28/01 MWH 4.00 $1200.00 | Review legal research
9/25/01 SCS 50 $207.50 | Confs



support a good faith defense, the exceptional nature of the case has been established by clear and
convincing evidence.

Liquid Dynamics further contends the court should exercise its discretion to award fees
because Vaughan engaged in litigation misconduct. To the extent Liquid Dynamics points to a
Vaughan witness’ deposition testimony, the insufficiency of Vaughan’s discovery production,
Vaughan’s post-trial motions and Vaughan’s examination of witnesses at trial, the arguments are
disregarded. Nevertheless, the court agrees Vaughan’s behavior as a litigant was inappropriate.
Vaughan’s misconduct is detailed in the ruling that enhanced damages are justified. See Liquid
Dynamics, 2005 U.S. Dist. LEXIS 6162 at *7-11. Vaughan’s pattern of irresponsible litigation
behavior proliferated the litigation, caused unreasonable expense and wasted judicial resources.”
Accordingly, the court exercises its discretion to award attorney’s fees.

B. Reasonableness of Fees

“The most useful starting point for determining the amount of a reasonable fee is the number
of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley v.
Eckerhart, 461 U.S. 424, 433, 103 S. Ct. 1933 (1983). After the initial calculation, “there remain
other considerations that may lead the district court to adjust the fee upward or downward.” /d. at
434. Other considerations may include proper documentation of hours worked, overstaffing,

redundant work, excessive hours, and the ultimate result of the litigation.” Jd. at 433-34.

Vaughan contends Liquid Dynamics also engaged in litigation misconduct and, if the
court awards fees based on misconduct, the amount should be reduced to $50,000, “the
maximum amount of attorney’s fees Liquid Dynamics may have incurred in response to the
alleged misdeeds.” Resp. at 17. Vaughan provides no support for its $50,000 figure and its petty
allegations of misconduct are not comparable to its own conduct.

4


10/21/04 | JJH 2.00 $840.00

10/21/04 | JJH 2.00 $840.00

10/22/04 | JH 2.00 $840.00

10/25/04 CA 50 $75.00

10/26/04 MWH 75 $270.00 | Legal research;

10/26/04 | BL 1.50 $195.00 | General reorganization

10/26/04 | JB 1.25 $293.75 | Legal research

10/27/04 | JB 2.25 $528.75 | Review legal research

10/29/04 | JB 1.50 $352.50 | Legal research

10/29/04 | KP 4.20 $651.00 | Legal research

10/29/04 | NA 3.00 $360.00 | Research Federal Circuit cases

10/30/04 | RIK 2.00 $580.00 | Legal research

10/31/04 | DEB 4,50 $922.50 | Conducting and analyzing legal research
11/01/04 | RIK 1.00 $290.00 | Legal research

11/01/04. | DEB 4.50 $922.50 | Conducting and analyzing legal research
11/01/04 | NA 5.25 $630.00 | Research

11/02/04 | DEB 8.50 $1742.50 | Conducting and analyzing legal research
11/02/04 NA 6.25 $750.00 | Research

11/03/04 | NA 8.00 $960.00 | Research

11/04/04 | DEB 8.50 $1742.50 | Conducting and analyzing legal research
11/04/04 | NA 8.00 $960.00 | Continue researching

11/05/04 | NA 5.00 $600.00 | Continue researching

11/07/04 | RIK 3.00 $870.00 | Legal research

11/07/04 | DEB 5.50 $1127.50 | Conducting and analyzing legal research
11/08/04 | DEB 7.50 $1537.50 | Conducting and analyzing legal research
11/08/04 | NA 4.75 $570.00 | Assemble

1S



and performance of legal services related to the suit”). Liquid Dynamics seeks $69,427 in expert
fees and $143,120 in costs.

A. Expert Fees

The court may not rely solely on § 285 to award expert fees. See Amsted Indus. Inc. v.
Buckeye Steel Castings Co., 23 F.3d 374, 376-77 (Fed. Cir. 1994). Section 285 encompasses
attorney’s fees, and expert witness fees fall under 28 U.S.C. § 1920 subject to 28 U.S.C. § 1821's
limitations. /d. at 377. However, the court has discretion under § 285 to award reasonable expert
witness fees in excess of the attendance fee specified in 28 U.S.C. § 1821. Jd. The court may
exercise its inherent power to shift expert fees to the losing party. However “[w]ithout a finding of
bad faith or fraud whereby the very temple of justice has been defiled, a court enjoys no discretion
to employ inherent powers to impose sanctions.” /d. at 378 (citations omitted). Moreover, “not
every case qualifying as exceptional under section 285 will qualify for sanctions under the court’s
inherent power . . . [the] court must therefore assess whether this case goes sufficiently beyond
exceptional within the meaning of section 285 to justify an award of expert fees as a sanction under
the court’s inherent power.” Jd. (citations omitted).

In Amsted, the Federal Circuit found the court abused its discretion by awarding expert fees,
even where the non-prevailing party copied the patent, lacked a good faith belief of non-infringement
and acted in a manner that repeatedly burdened the court. /d. at 379. Although those actions
supported enhanced damages and attorney’s fees, the actions “did not amount to a fraud on the court
or an abuse of the judicial process.” /d Here, the court previously awarded Liquid Dynamics
$16,074.60 in fees related to experts under § 1920. While Vaughan’s conduct is sufficient to support

the award of enhanced damages and attorney’s fees, it does not support a finding that Vaughan

17


be exceptional; (2) the district court may exercise its discretion; (3) the fees must be reasonable; and
(4) the fees may be awarded only to the prevailing party.” Machinery Corp. of America v. Gullfiber
AB, 774 F.2d 467, 470 (Fed. Cir. 1985). Liquid Dynamics is clearly the prevailing party.
Accordingly, the court must determine whether the case is exceptional, whether to exercise
discretion in awarding fees, and whether the requested fees are reasonable.

As the prevailing party, Liquid Dynamics bears the burden of proving the exceptional nature
of the case by clear and convincing evidence. See e.g., Beckman Instruments, Inc. v. LKB Produkter
AB, 892 F.2d 1547, 1551 (Fed. Cir. 1989). A willful infringement finding is sufficient to support
an attorney’s fee award. The court must explain the failure to award attomey’s fees in the face of
awillfulness determination. See e.g., Applied Med. Res. Corp. v. United States Surgical Corp., 967
F. Supp. 861 (E.D. Va. 1997), citing Avia Group Int'l v. L.A. Gear California, Inc., 853 F.2d 1557,
1566 (Fed. Cir. 1988). However, neither a willfulness determination nor an enhanced damages
award compel attorney’s fees. See id. The attorney’s fee award remains a matter of discretion. /d.

Liquid Dynamics contends this case is exceptional because of the willful infringement
verdict, Vaughan’s intentional copying of the ‘414 patent and because Vaughan had no good faith
belief of non-infringement. Vaughan’s contentions regarding the absence of evidence of copying
and its reasonable belief of non-infringement must be rejected. The court addressed and rejected
those arguments in its enhanced damages ruling and determined: (1) the evidence supports a finding
that Vaughan deliberately copied Liquid Dynamics’ patented design; and (2) the jury’s rejection of
Vaughan’s good faith defense was supported by sufficient evidence. See Liquid Dynamics Corp. v.

Vaughan Co., Inc.,No. 01 C 6934, 2005 U.S. Dist. LEXIS 6162, *4-7 (N.D. Ill. Mar. 22, 2005). In

light of the willfulness verdict, the evidence of intentional copying and the lack of evidence to


DISCUSSION

I. Timeliness

Vaughan contends Liquid Dynamics’ motion for attorney’s fees is untimely under Local Rule
54, which requires the motion be filed no later than 90 days after judgment. Judgment was entered
on the inequitable conduct counterclaim on November 15,2004. Liquid Dynamics filed its original
attorney’s fees motion on February 10, 2005 — within the 90 day limit. The motion for fees was
complete, but Liquid Dynamics requested leave to supplement the motion to include fees incurred
in bringing the motion. Because the filing, on its face, indicated Liquid Dynamics sought leave to
file additional materials, the court struck the motion without prejudice on February 15th. Liquid
Dynamics filed a renewed motion for attorney’s fees — and withdrew its request to supplement with
additional fees — the next day. While the renewed motion was filed after the 90 day deadline, the
original timely filing and the renewed filing request an identical amount in fees and costs. Vaughan
has therefore not been prejudiced. Vaughan received timely service of the motion. Because the
original motion included the parties’ Local Rule 54.3 joint statement, Vaughan was on notice of the
bases for Liquid Dynamics’ motion in January 2005. Accordingly, the motion is timely."
IL Attorney’s Fees

A. Exceptional Case

“The court in exceptional cases may award reasonable attorney fees to the prevailing party.”

35 U.S.C. § 285. The requirements for awarding attorney’s fees under § 285 are: “(1) the case must

"Vaughan reminds the court that its attorney’s fees motion was struck as untimely after it
succeeded on summary judgment. See Dkt. No. 111-1. However, Vaughan completely failed to
file its motion within the 90-day limit and failed to provide Liquid Dynamics with documentation
of fees as required by Local Rule 54.3(d)(4).


8/19/04 RIK 8.00 $2320.00 | Legal research legal research

8/20/04 RIK 7.00 $2030.00 | Legal research _legal research

8/24/04 KSD 3.00 $300.00 | Further research

8/25/04 KSD 4.25 $425.00 | Research

8/26/04 KSD 4.25 $425.00 | Reviewed

9/07/04 NA 4.00 $480.00 | Research

9/08/04 KP 5.00 $775.00 | Research methods

9/08/04 CA 1.50 $202.50 | Research case law

9/08/04 NA 7.75 $930.00 | Research

9/09/04 NTP 8.50 $1317.50

9/09/04 KP 4.00 $620.00 | Research

9/09/04 CA 3.75 $506.25 | Reviewed legal
research

9/09/04 NA 3.75 $450.00 | Research

9/10/04 KP 80 $124.00

9/10/04 CA 4.75 $641.25 | Legal research

9/13/04 CA 1.50 $202.50 | Research

9/13/04 NA 6.50 $780.00 | Research

9/14/04 NA 2.25 $270.00 | Research write memo

9/15/04 NA 4.50 $540.00 write memo

9/16/04 CA 6.00 $810.00 | Research

9/16/04 NA 1.50 $180.00 | Research

9/17/04 NA 2.03 $274.05 | Research

9/20/04 CA 1.27 $171.45 | Drafted

9/21/04 MWH 1.00 $360.00 | Review

9/21/04 CA 1,39 $187.65 | Drafted

9/21/04 NA 1.00 $120.00 | Research

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11/09/04 | RIK 4.00 $1160.00 | Legal research
11/09/04 | DEB 9.50 $1947.50 | Conducting and analyzing legal research
11/09/04 | NA 8.00 $960.00
11/10/04 | JFF 1.00 $475.00 | Conference and legal research
11/10/04 NA 2.00 $240.00
11/12/04 | RIK 3.00 $870.00 | Legal research
11/15/04 | JB 6.25 $1468.75 | Prepare and review documents
11/15/04. | NA 4.50 $540.00
11/01/04 | KP 4.80 $744.00 | Legal research
11/02/04 | KP 3.80 $589.00 | Legal research
11/03/04 | KP 3.20 $496.00 | Legal research
11/04/04 | KP 3.30 $511.50 | Legal research
11/18/04 | JFF .50 $237.50 | Legal research
11/29/04 | NA 6.25 $750.00 | Review cases
11/30/04 | NA 1.25 $150.00 | Research
Total: $109,017.70
4, Total Attorney’s Fees Awarded

Liquid Dynamics requests $1,615,455 in attorney’s fees. The court reduces the requested

amount by $5197.50 for fees charged for secretarial staff and by $109,017.70 for inadequate billing

descriptions. Accordingly, Liquid Dynamics is awarded $1,501,239.80 in attorney’s fees.

Ill. Non-Taxable Costs

Section 285 is not limited to attorney’s fees, but also includes expenses or costs not taxable

under 28 U.S.C. § 1920. See Central Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1578 (Fed.

Cir. 1983) (Section 285 “include[s] those sums that the prevailing party incurs in the preparation for

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