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Cellport Systems, Inc. v. Peiker Acustic GMBH & Co., KG

United States District Court, D. Colorado

December 20, 2016

CELLPORT SYSTEMS, INC., Plaintiff,
v.
PEIKER ACUSTIC GMBH & CO. KG, Defendant.

          ORDER

          R. Brooke Jackson United States District Judge.

         The parties ask the Court to determine the amount of attorney's fees and costs that Peiker must pay Cellport. Peiker does not challenge the hourly rates charged by Cellport's attorneys, nor does it dispute that the time recorded was reasonable for the work done. The dispute is whether all of the work done was necessary or reasonable in light of the result obtained and an opportunity Cellport had as early as May 2011 to settle for approximately what it ultimately recovered. For the reasons discussed in this order, the Court awards $1, 340, 235.55 in fees and costs and directs that the final judgment be amended to reflect that award.

         BACKGROUND

         This case arises from a License Agreement into which the parties entered as of October 1, 2004. Cellport has patents concerning systems for the use of mobile telephones in vehicles. It granted Peiker a license to use its patented technology in Peiker products in exchange for royalties on terms spelled out in the License Agreement. The parties' disagreement as to whether Peiker breached the agreement and/or infringed Cellport's patents spawned eight years of hotly contested litigation.

         To recall just a few milestones:

• The case was filed in state court in Boulder, Colorado on March 9, 2009 and was removed to federal court on April 30, 2009.
• On May 25, 2011 the parties participated in mediation with former state district judge Murray Richtel of the Judicial Arbiter Group in Denver. They did not reach a settlement, but Peiker made a substantial settlement offer that is relevant to the current issue, as I will discuss later.
• On February 6, 2012 this Court resolved disputes between the parties concerning interpretation of certain key terms of the License Agreement. ECF No. 201. Without getting into details, the Court concluded that the Agreement created presumptions that Peiker products with certain characteristics were covered by the Agreement, but that Peiker could rebut the presumptions if it could show that the product did not use technology covered by a Cellport patent. Id. at 5-11. The Court also interpreted various terms in the relevant patents pursuant to a Markman hearing that had been conducted earlier. Id. at 15-17.
• The case was tried to the Court September 20-21, 24-25, and 27-29, 2012 with final arguments given on November 29, 2012.
• This Court issued its findings, conclusions and judgment on January 2, 2013. ECF No. 259. In that order the Court addressed Cellport's claims with respect to seven Peiker products. It concluded that Cellport was entitled to royalties as to two of those products and awarded damages, including prejudgment interest, in the amount of $613, 443. Id. at 44.
• Although Cellport received a money judgment, it was for far less than Cellport sought. Cellport appealed. It challenged this Court's rulings on the five products as to which Peiker prevailed, its determination of the appropriate rate of prejudgment interest, and its determination that neither party prevailed for purposes of a contractual award of attorney's fees. Peiker filed a conditional cross-appeal. ECF Nos. 262 and 265.
• The Court of Appeals affirmed in part, reversed in part, and remanded for further proceedings. Cellport Systems, Inc. v. Peiker Acustic GMBH & Co., KG, 762 F.3d 1016 (10th Cir. 2014). The court disagreed that the License Agreement created only rebuttable presumptions and found that, for the most part, the disputes must be resolved under the terms of the contract, not on whether the products infringed Cellport's patents. See Id. at 1021-23. The court noted that Peiker conceded that the Agreement covered two of the five remaining disputed products (CKII/CIB's sold to Volkswagen and BMW), but that the district court did not award royalties due to its finding that the products did not infringe a Cellport patent. The court therefore remanded with directions to determine the royalties due on the CKII/CIB products. Id. at 1023. The court also directed this Court to consider further whether royalties were due on the BT-PSC and CKVI products, but it affirmed this ruling for Peiker as to the BMW SIAB product. Id. at 1023-28. The court affirmed the determination of the prejudgment interest rate and directed this Court to reconsider the prevailing party/attorney's fees issue “given the new terrain in the case.” Id. at 1029.
• On remand this Court addressed and resolved a new dispute concerning the date from which prejudgment interest should run. ECF No. 301. It determined that royalties are owed on the CKVI product but not on the BT-PSC. ECF No. 305. And it determined that Cellport was the prevailing party and is entitled under the License Agreement to an award of its reasonable attorney's fees. ECF No. 320. In the latter order the Court urged the parties to attempt to reach an agreement on the amount of the fees to be awarded. Id. at 2-4.
• The parties did not agree on the amount of fees to be awarded, but they did jointly submit a stipulation that resolved several matters. ECF No. 325. They stipulated that Cellport had incurred $2, 501, 607.79 in attorney's fees and costs from May 8, 2008 (before the lawsuit was filed) through November 30, 2016, and broke that figure down according to various stages of the case. Id. at ¶2 and their Exhibit A, ECF No. 325-1. They stipulated to the corresponding amounts incurred by Peiker. Id. at ¶4. They informed the Court that they would provide the itemized billings supporting these numbers at the hearing scheduled for December 13, 2016 (although at the hearing the attorneys for both sides acknowledged that they had not attempted to evaluate or to make an argument based on individual line items due to the voluminous nature of the billing sheets). Id. at ΒΆΒΆ3, 5. Peiker stipulated that it would not challenge either the reasonableness of the hourly rates charged by Cellport's attorney's or the amount of time recorded for the work Cellport asked them to ...

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