NJ Court Grants Exceptional Case Fees Based on Speculative Infringement Suit
The US District Court for the District of New Jersey awarded Luitpold more than $210,000 in fees and costs under 35 USC § 285 after granting its motion for judgment on the pleading under Fed. R. Civ. P. 12(c). Par Pharmaceutical, Inc. v. Luitpold Pharmaceuticals, Inc., Case No. 16-cv-2290 (D.N.J., Apr. 24, 2017) (Walls, J).
Senior Judge William H. Walls granted Luitpold’s Rule 12(c) motion because its abbreviated new drug application (ANDA) product did not presently infringe, and Par’s infringement claims were based entirely on speculation that the US Food and Drug Administration would require Luitpold to change its product formulation in a manner that would infringe Par’s patents.
The court found that Luitpold was the prevailing party because it “received at least some relief on the merits, which altered the legal relationship of the parties.” Judge Walls found the case to be exceptional based on Par’s unjustified maintenance of the lawsuit and attempts to use discovery to police Luitpold’s future conduct. Specifically, the court cited the following:
The lack of any factual basis in the complaint and amended complaint to support allegations that Luitpold’s current ANDA infringed the patents-in-suit
Par’s refusal to admit that Luitpold’s operative ANDA did not infringe
The absence of credible allegations or evidence that Par faced irreparable harm absent declaratory relief
Par’s vigorous engagement in overbroad discovery of highly confidential, competitive information, including the filing of a baseless motion to compel
Finally, the court determined that Luitpold’s fee request was reasonable. The court first calculated a lodestar amount, which is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. The law firm representing Luitpold billed hourly rates ranging from $215 to $950, with most of the work by lawyers billed at hourly rates between $300 and $800. The court found $925 per hour to be unreasonable, and determined fees would be awarded at a rate of $550 per hour for lawyer work and $125 per hour for paralegal work.
The court then determined how much time was reasonably expended on the matter. Luitpold requested compensation for 485 hours of work in total, comprising 419 hours of lawyer work and 66 hours of work typically performed by paralegals. The court found Luitpold’s billing unreasonable in part, because it included hours incorrectly billed to this matter, hours billed for unnecessary tasks due to inexperience, and hours for tasks that should have been performed by more cost-effective billers (i.e., lawyers doing paralegal work). The court also reduced the number of hours to account for time spent on work product and issues that were not raised with the court.
Based on its detailed review of the billing records submitted, the court awarded a lodestar total of $207,482.50. The court also awarded the full amount of $4,580.93 in requested costs, which included costs expended in the delivery of service and documents, payment of filing fees, travel to an in-person hearing, and necessary document reproduction.