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
`
`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 1 of 28
`
`
`
`
`MICHAEL A. SHERMAN (SBN 94783)
`masherman@stubbsalderton.com
`JEFFREY F. GERSH (SBN 87124)
`jgersh@stubbsalderton.com
`SANDEEP SETH (SBN 195914)
`sseth@ stubbsalderton.com
`WESLEY W. MONROE (SBN 149211)
`wmonroe@stubbsalderton.com
`VIVIANA B. HEDRICK (SBN 239359)
`vhedrick@stubbsalderton.com
`STUBBS ALDERTON MARKILES, LLP
`15260 Ventura Boulevard, 20TH Floor
`Sherman Oaks, CA 91403
`Telephone:
`(818) 444-4500
`Facsimile:
`(818) 444-4520
`
`Attorneys for PersonalWeb Technologies, LLC
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`SAN JOSE DIVISION
`
`
`CASE NO.: 5:18-md-02834-BLF
`
`IN RE PERSONAL WEB TECHNOLOGIES,
`LLC, ET AL., PATENT LITIGATION
`
`AMAZON.COM, INC. and AMAZON WEB
`SERVICES, INC.,
`
`v.
`
`PERSONALWEB TECHNOLOGIES, LLC
`and LEVEL 3 COMMUNICATIONS, LLC,
`
`
`Defendants.
`
`
`Plaintiffs,
`
`PERSONALWEB TECHNOLOGIES, LLC
`and LEVEL 3 COMMUNICATIONS, LLC,
`
`Counterclaimants,
`v.
`AMAZON.COM, INC. and AMAZON WEB
`SERVICES, INC.,
`
`
`
`Counterdefendants.
`
`PERSONALWEB TECHNOLOGIES, LLC, a
`Texas limited liability company, and
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`
`
`
`
`Case No.: 5:18-cv-00767-BLF
`Case No.: 5:18-cv-05619-BLF
`
`
`DECLARATION OF EXPERT GERALD
`G. KNAPTON IN SUPPORT OF
`PERSONAL WEB TECHNOLOGIES,
`LLC’S SUPPLEMENTAL BRIEFING
`FOR HEARING ON THE
`DETERMINATION OF THE
`REASONABLENESS OF ATTORNEYS’
`FEES AND COSTS REQUESTED BY
`AMAZON.COM, INC., AMAZON WEB
`SERVICES, INC., AND TWITCH
`INTERACTIVE, INC.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`CASE NO.: 5:18-MD-02834-BLF
`CASE NO.: 5:18-CV-00767-BLF
`CASE NO.: 5:18-CV-05619-BLF
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 2 of 28
`
`
`LEVEL 3 COMMUNICATIONS, LLC, a
`Delaware limited liability company
`
`Plaintiffs,
`v.
`TWITCH INTERACTIVE, INC. a Delaware
`corporation,
`
`Defendant.
`
`
`
`
`
`
`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
`
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`
`
`
`- 2 -
`
`CASE NO.: 5:18-MD-02834-BLF
`CASE NO.: 5:18-CV-00767-BLF
`CASE NO.: 5:18-CV-05619-BLF
`
`

`

`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
`
`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 3 of 28
`
`
`DECLARATION OF GERALD G. KNAPTON
`I, Gerald G. Knapton, make this declaration in support of PersonalWeb Technologies,
`LLC’s (“PersonalWeb”) Supplemental Briefing for Hearing on the Determination of the
`Reasonableness of Attorneys’ Fees and Costs Requested by Amazon.com, Inc., Amazon Web
`Services, Inc., and Twitch Interactive, Inc. (collectively, “Amazon”) in the Motion for Attorney
`Fees and Costs (ECF 593) and Bill of Costs (ECF 589) (collectively, “Motion”). PersonalWeb has
`engaged me to offer my expert opinion on the reasonableness and necessity of the proffered fees,
`costs and disbursements. I am making this declaration as an expert witness, based on matter
`(including my specialized knowledge, skill, experience, training and education) perceived by, or
`personally known to me, or made known to me that is of a type that may reasonably be relied upon
`by an expert in forming an opinion upon the subject to which my testimony relates.
`
`I.
`INTRODUCTION
`
`I was retained by PersonalWeb to assist them with examining the evidence
`1.
`submitted by Amazon in support of Amazon’s Motion for Fees and costs filed pursuant to 35
`U.S.C. § 285, Rule 54, the Federal Rules of Civil Procedure, Local Rules 54-1 through 54-5, and
`this Court’s order of October 6, 2020 (ECF 636) regarding “exceptional case” fees (“Order”). I
`have read and examined the Order, including the Court’s holding at page 33:6-12:
`
`“This case is exceptional because (1) PersonalWeb’s infringement claims
`related to Amazon S3 were objectively baseless and not reasonable when
`brought because they were barred due to a final judgment entered in the
`Texas Action; (2) PersonalWeb frequently changed its infringement positions
`to overcome the hurdle of the day; (3) PersonalWeb unnecessarily prolonged
`this litigation after claim construction foreclosed its infringement theories; (4)
`PersonalWeb’s conduct and positions regarding the customer cases were
`unreasonable; and (5) PersonalWeb submitted declarations that it should have
`known were not accurate.”
`Amazon filed its Motion for fees several months earlier on March 20, 2020--
`2.
`months before that guidance (ECF 593), so it included fees for work that was not found to be for
`“exceptional” claims. It submitted invoices that total 12,783.2 hours of work done over 25 months
`by Fenwick & West LLP (“Fenwick”), Amazon’s counsel, from January 8, 2018 through February
`
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`
`
`
`-3-
`
`CASE NO.: 5:18-MD-02834-BLF
`CASE NO.: 5:18-CV-00767-BLF
`CASE NO.: 5:18-CV-05619-BLF
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 4 of 28
`
`
`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
`
`29, 2020. Amazon seeks fees of $6,100,000.00, and non-taxable expenses of $323,668.06 (ECF
`593 at 15:23-25)
`In its motion Amazon estimated that they would incur a further $450,000 in fees
`3.
`through June 24, 2020 (ECF 592-1 - Gregorian 13:7-10) although no evidence has been submitted
`to support such a claim.
`
`II.
`BACKGROUND OF EXPERT
`My qualifications are more fully set out in my qualifications and curriculum vitae
`4.
`attached to this opinion as Exhibit 1. In sum, I have been an attorney since 1977 and am a senior
`partner and shareholder at Ropers Majeski, P.C., which has law offices in San Jose, Redwood
`City, San Francisco, Walnut Creek, Los Angeles, Costa Mesa, New York City, Boston and Paris.
`I have reviewed well over $4.5 billion dollars in legal fees and related work product. I have been
`qualified as an expert witness on the reasonableness and necessity of legal fees and testified in
`person to arbitrators, courts, and juries more than 59 times, in many parts of the United States,
`including California, Delaware, and New York. I have reviewed charges in well over a thousand
`matters. I am admitted to practice before this honorable Court (since 1979) and I am a member of
`the American Intellectual Property Law Association (“AIPLA”). Many of my fee matters have
`involved determining reasonable legal fees and costs for patent litigation in federal courts and/or
`the International Trade Commission (ITC).
`I subscribe to the Economic Surveys by AIPLA, Lex Machina reports on patent
`5.
`litigation, and the Wolters Kluwer Real Rate Reports on many kinds of litigation including patent
`litigation. I regularly review invoices and related work product for patent litigation and by this
`work I have gained an understanding of the reliability of those resources
`As a result of this I have developed an understanding of the process and costs of
`6.
`patent litigation in the ITC and in many federal courts including the Northern District of
`California.
`Documents reviewed and summary of documents created:
`I have signed the amended protective order that I am told is controlling in this case
`7.
`
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`
`
`
`- 4 -
`
`CASE NO.: 5:18-MD-02834-BLF
`CASE NO.: 5:18-CV-00767-BLF
`CASE NO.: 5:18-CV-05619-BLF
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 5 of 28
`
`
`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
`
`(ECF 427), interviewed counsel for PersonalWeb, reviewed the public files and records in this
`matter and similar matters as well as the relevant patent file wrappers, tutorials, and reference
`materials. Based on my review, study and research, my staff and I have compiled several
`Microsoft® Excel® spreadsheets (Exhibits 2, 3, 4, 6 and 8) to help me quantify my opinions.
`Exhibit 2 is an Excel spreadsheet that contains all of the information found in Fenwick’s invoices
`at ECF 592-5. Exhibit 3 is an Excel spreadsheet that contains all of the information taken from
`Amazon’s Time Chart at ECF 592-6 with the fees for each timekeeper in each category taken from
`the “Effective Rate with Final Discount” column. Exhibit 4 is an Excel spreadsheet that compiles
`the costs listed by Fenwick in each of its invoices. Exhibit 5 is a compilation from the 2019
`AIPLA Report of the Economic Survey that contain the total amounts and rates for fees charged
`by patent litigators in Northern California. Exhibit 6 is an Excel spreadsheet that lists all 43
`timekeepers that billed time, taken directly from the Fenwick invoices at ECF 592-5. Exhibit 7
`lists each of the Fenwick attorneys that attended the depositions that were noticed in this action.
`Exhibit 8 is an Excel spreadsheet that summarizes all of the totals from Fenwick’s invoices,
`including the total hours, fees, discounts, costs, and individual invoice totals for each invoice at
`ECF 592-5, as well as reflects all discounts and adjustments made to each total that appears to
`form the basis for Amazon’s “bottom line” fee request in its Motion.
`As this Court will determine whether to allow the request for expert witness fees
`8.
`and the other “non-statutory” costs, my analysis assumes, but does not concede, that those
`amounts are at issue. Based on this it is my opinion that the reasonable and necessary fees that can
`be awarded to Amazon are $1,302,947.86 and, if they are of the sort deemed compensable by the
`Court on an exceptional case theory, reasonable and necessary non-taxable costs are $203,300.10.
`This will be developed in the following sections and supported by the eight exhibits.
`There are three discrepancies in the Amazon numbers:
`First: In the columns on page one of Amazon’s compilation of charts, entitled
`9.
`“Fenwick & West LLP Time Accrued and Effective Rates by Category” (ECF 592-7) (“Time
`Chart”), Amazon lists the “Effective Rate Before Final Discount” side by side with the “Effective
`Rate With Final Discount” in ECF 592-7 and then it improperly uses the higher of the two rate
`
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`
`
`
`- 5 -
`
`CASE NO.: 5:18-MD-02834-BLF
`CASE NO.: 5:18-CV-00767-BLF
`CASE NO.: 5:18-CV-05619-BLF
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 6 of 28
`
`
`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
`
`scenarios to compile the fees totals in the Breakdown of Categories in the eleven pages that follow
`in the charts. Those total $6,987,341.17 for all categories using the higher rates. That is not the
`$6,100,000.00 in fees they are seeking in their Motion. This is a difference of $887,341.17. I
`have used the “Effective Rate With Final Discount” rates in my Exhibit 3 attached hereto to
`calculate the face amount of fees for the nineteen categories in ECF 592-7, and that shows a total
`of $6,099,998.61 in fees at line 342, so I believe that we are starting with the same numbers.
`Second: There are 43 timekeepers who have time contained in the Fenwick
`10.
`invoices found at ECF 592-5. These timekeepers are listed by me in Exhibit 6 attached hereto.
`Mr. Gregorian explains in ECF 592-1 at page 12 that $189,009.85 in fees and 556.3 hours of time
`by 29 timekeepers1 is excluded from the total they seek, but he does not say which timekeepers are
`withdrawn, nor are the invoices marked to indicate which timekeepers are withdrawn. Based on
`my review of Fenwick’s invoices, this exclusion is apparently what comprises the “Final
`Discount” that results in the $6,100,000.00 in requested fees. It appears, based on my review of
`Mr. Gregorian’s declaration that the client requested a thinning of the time by 43 timekeepers that
`was included in the invoices as a write-off, not a discount (ECF 592-1 at p. 12).
`Third: Mr. Gregorian provides a narrative summary of what kinds of tasks
`11.
`Amazon is collecting in time and fees for each of the 19 categories in its Time Chart (ECF 592-7,
`pp. 13-15). However, there is no way to identify exactly which of the time descriptions in the
`invoices are collected in many of the categories. The “Case Management” category is a 2,143.3-
`hour catchall for sixteen or more different tasks. Such grouping is unusual in my experience and
`seems contrary to the standing order in this case requiring itemization.
`Four kinds of adjustments are offered in this declaration:
`There are four kinds of proposed adjustments in this declaration as summarized in
`12.
`paragraph 19 below. One: Ten of the nineteen listed categories are not caused by work determined
`to be “exceptional” by this Court, so that time and fees is not properly included; Two: Nine
`specific categories are either included in full or modified to some extent for the reasons shown;
`Three: There are also three kinds of concerns (discussed in paragraphs 61 et seq.) that apply across
`
`1 I could find only 27 that were excluded. See Exhibit 6.
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`- 6 -
`
`
`
`CASE NO.: 5:18-MD-02834-BLF
`CASE NO.: 5:18-CV-00767-BLF
`CASE NO.: 5:18-CV-05619-BLF
`
`

`

`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
`
`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 7 of 28
`
`
`the board to all the categories; and Four: The “non-taxable expenses” are not usually allowed
`under Federal Circuit guidance for “exceptional” patent cases in my experience, but an analysis of
`the proffered costs is shown in Exhibit 4 if the Court decides to consider them.
`The Court’s Order provides guidance in determining a lodestar:
`13. While I am not acting as an advocate, it is my understanding that the award of
`attorneys’ fees under 35 U.S.C. § 285 and applicable case law must be reasonable and could be
`zero. I have relied on current Federal Circuit, 9th Circuit, and Supreme Court precedent in
`formulating my opinions herein. See e.g. Special Devices, Inc. v. OEA, Inc., 269 F.3d 1340, 1344
`(Fed. Cir. 2001)); City of Burlington v. Dague, 505 U.S. 557, 562 (1992) (“[t]he ‘lodestar’ figure
`has, as its name suggests, become the guiding light of our fee-shifting jurisprudence.”) Welch v.
`Met. Life Ins. Co., 480 F.3d 942, 945–46 (9th Cir. 2007) (the party seeking fees bears the initial
`burden of establishing the hours expended and must provide detailed time records of tasks
`completed and time spent.) Hensley v. Eckerhardt, 461 U.S. at 433-34 (If “documentation of hours
`is inadequate, the district court may reduce the award” and exclude excessive, redundant, or
`unnecessary hours).
`I will recommend specific “hour-by-hour” cuts and also some percentage
`14.
`reductions as this Court explained last year was permissible in a fee application in patent litigation:
`
`“[T]here are two means by which a court may determine whether the
`number of hours is “reasonable.” .... First, a court may conduct either an
`“hour-by-hour analysis of the fee request” and exclude those hours for
`which it would be unreasonable to compensate the prevailing
`party....Second, “when faced with a massive fee application the district
`court has the authority to make across-the-board percentage cuts either in
`the number of hours claimed or in the final lodestar figure as a practical
`means of [excluding non-compensable hours] from a fee application.” Id.
`(citation omitted). The Ninth Circuit has held that it makes no difference
`in terms of the final amount to be awarded whether the court applies the
`percentage cut to the number of hours claimed, or to the lodestar figure.
`Id. Consistent with this principle, the Court proceeds to analyze whether
`an across-the-board percentage cut should be applied to any category.”
`
`Phigenix Inc. v. Genentech Inc. Case no.15-cv-01238-BLF, 2019 WL 2579260 (filed
`06/24/2019).
`
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`
`
`
`- 7 -
`
`CASE NO.: 5:18-MD-02834-BLF
`CASE NO.: 5:18-CV-00767-BLF
`CASE NO.: 5:18-CV-05619-BLF
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 8 of 28
`
`
`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
`
`Issues addressed in this declaration:
`The issues that I will address include applying this Court’s Order explaining what
`15.
`is deemed “exceptional” and what is not; the lack of linkage between the Court-required charts and
`the Fenwick invoices; the much lower customary charges for similar litigation; the rates before the
`final discount; seeking time for work that was excepted from the “exceptional” determination;
`submitting a list of work done that is different from Amazon’s Time Chart; “training” time for
`less-experienced lawyers; redacted descriptions of work; allocation for S3 case time and other
`time; the level and amount of staffing, duplication, overhead, and unnecessary time billed;
`excessive time billed for conferencing and meetings; excludable time billed, top-heavy billing for
`some tasks, relationship of fees on which Amazon prevailed, block billing, unclear or redacted
`time entries, “other agenda” issues and the “pending” status of the appeal.
`
`III.
`MATERIAL SUBMITTED BY AMAZON
`The Court’s May 30, 2019 standing order re civil cases contains limits and
`16.
`requirements for many kinds of motions. The rule for motions for attorney’s fee, Section VII reads
`in part: “The Court is primarily interested in the number of hours spent per task and per attorney,
`along with the effective billing rate associated with those hours. The total number of hours
`reflected in this chart must be identical to the number of hours set forth in the fees motion.”
`17. Mr. Gregorian’s declaration (ECF 592-7 pages 13:18 to 14:5) explains what types
`of work is included in each chart category. “Case Management” is a broad catchall category for
`about 16 kinds of work comprising 2,143.3 hours. He explained “Case Management’s” makeup:
`
`“They include reviewing local rules and docket management (i.e. calendar
`management and drafting requests for extensions of time); initial court filings
`(i.e. notice of appearances, pro hac vice applications, and corporate
`disclosures/certificates of interest); drafting case management statements and
`attending case management conferences; and providing status updates to
`Amazon, Twitch, and each indemnified Amazon customer. These relate not
`only to the multidistrict litigation before this Court, but also to each of the six
`judicial districts in which PersonalWeb filed the customer lawsuits before
`consolidation, the proceedings before the JPML, and the appeal before the
`Federal Circuit. For drafting individual engagement letters (including
`investigating potential conflicts), litigation hold memoranda, and
`indemnification agreements, and advising on issues concerning service
`CASE NO.: 5:18-MD-02834-BLF
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`CASE NO.: 5:18-CV-00767-BLF
`
`CASE NO.: 5:18-CV-05619-BLF
`
`
`- 8 -
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 9 of 28
`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 9 of 28
`
`(including service under the Hague Convention for non-US. entities) and case
`strategy. Case management also includes weekly interoffrce conferences for
`the team of Fenwick attorneys and paralegals to assign pending tasks and
`discuss case strategy.”
`
`18.
`
`There is no identifying mark or specific link identified between the time included
`
`in each chart category in Amazon’s Time Chart and the work descriptions in the foundational
`
`Fenwick bills of 694 pages provided in ECF 592—5. The descriptions in the invoices are not labeled
`
`or marked as belonging to a particular category in the Time Chart. Because of this, I cannot
`
`precisely identify and correlate all of the work summarized in each of the 19 categories in
`
`Amazon’s Time Chart to each of the 5,656 lines of “hour-by—hour” work descriptions that I
`
`gathered fiom Fenwick’s invoices in ECF 592-5 and present in detail in my Exhibit 2. As such, I
`
`have relied on the submitted time in the categories in the Time Chart, and prepared a summary of
`
`the data shown on the Fenwick invoices in my Exhibit 8, which is a summary of the invoices (the
`
`“Invoice Summary”), for as many totals as I could, and to show how I arrived at the starting
`
`point/amount of $6,099,998.61 for fees, which Amazon “rounds up” to $6,100,000.00 as their fee
`
`request.
`
`The Exceptional and Not-Exceptional Categories:
`
`19.
`
`Amazon presents a categories chart, the Time Chart (ECF 592-7), in an attempt to
`
`comply with the standing order that shows Amazon’s requested hours in 19 categories of work. As
`
`is presented in PersonalWeb’s brief, ten of the categories are for work listed that was not deemed
`
`“exceptional” by the Court. Four are entirely within the scope. Five are only partly within that
`
`scope. Some of the work and time listed is objectionable for reasons that will be explained more
`
`fully below.
`
`Overview of claimed totals by listed category
`
`Cateo
`
`#timekeeers
`
`Fact Discovery
`14 timekee ers
`
`Hours submitted
`
`2,753.4 Yes - only part is reasonable
`
` Case Management
`
`2,143.3 Yes, in part
`
`(16 tirnekeepers)
`Expert Discovery
`(15 tirnekeepers)
`Summary Judgment on Claim
`Preclusion/Kessler Doctrine
`
`1,593.1 Yes, in part
`
`1,050.3 Yes
`
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`
`- 9 -
`
`CASE N0.: 5:18—MD—02834—BLF
`CASE N0.: 5:18—CV—00767—BLF
`CASE N0.: 5:18—CV—05619—BLF
`
`auto
`
`\OOO\10\
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 10 of 28
`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 10 of 28
`
`Cateo
`
`# timekeeers
`
`Hours submitted
`
`Overview of claimed totals by listed category
`
`13 timekee ers ——
`
`12 timekee ers
`
`l3 timekee ers
`
`Motion for Preliminary
`Injunction
`
`(10 timekeepers)
`Investigate/Respond to
`PersonalWeb’s Claims
`13 timekee ers
`
`410.5 Yes, in part
`
`454.3 No
`
`
`
`Summary Judgment for Non-
`Infringement
`13 timekee ers
`
`370.1 Yes, in part
`
`11 timekee ers
`
`13 timekee ers
`
`11 timekee ers
`
`10 timekee ers
`
`Motion for Judgment on the
`Pleadings
`13 timekee ers
`
`Declaratory Judgment
`Complaint.
`10 timekee ers
`
`l3 timekee ers
`PersonalWeb’s Motion to
`Dismiss
`8 timekee ers
`
`PersonalWeb’s Rule 54(b)
`motion
`8 timekee ers
`
`Damages Contentions
`(4 timekeepers)
`Totals CF 592-7 “36 2
`
`263.9 No
`
`174.1 Yes, in part
`
`73.4 Yes
`
`25.8 No
`
`22.7 No
`
`12,2328
`
`20.
`
`The Fenwick invoices submitted by Amazon in ECF 592-5 (and as shown in
`
`Exhibits 2 and 6) have work by 43 timekeepers from January 8, 2018 to January 31, 2020. The
`
`total is 12,7832 hours and a total face amount (i.e., pre-discounted) of fees of $8,436,772.50 as
`
`totaled in Exhibit 6, and afler the first discount, net fees of $7,176,351.02 (Exhibit 8 line 31).
`
`111
`l
`h “finl”di
`ere was apparentyanot er
`a
`
`fb 13
`scount o a out
`
`percent
`
`2b
`' 29'
`k
`yremovmg
`time eepers .
`
`2 $6,099,998.61 / $6,987,341.17 = .873, so a 13% “final” discount.
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`
`- 10 -
`
`CASE N0.: 5:18—MD—02834—BLF
`CASE N0.: 5:18—CV—00767—BLF
`CASE N0.: 5:18—CV—05619—BLF
`
`\OOONON
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 11 of 28
`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 11 of 28
`
`It is not shown and cannot be determined exactly which of the line entries in the Fenwick invoices
`
`is included in the Time Chart for category totals for each category, and what is not. Exhibit 2 has
`
`all the time and all the descriptions from the Fenwick invoices. Exhibit 2 applies a mathematical
`
`factor of .85 (in Column G) to reach the net fees for each line of the spreadsheet although the face
`
`amount of the discount varies by month from 0% to 17% (as shown in ECF 592-5), and this same
`
`mathematical factor is applied in my Exhibit 8 invoice summary. In both, the total reflects a 15%
`
`percent discount.
`
`21.
`
`The invoiced hours each month vary greatly from 2 hours to 1,791 hours as shown
`
`in the invoices, Exhibit 8, and graphically by this hour per invoice chart:
`
`Hours/Invoice
`
`Objective data on costs and hourly rates for patent litigation:
`
`22.
`
`The 12,7832 hours and fees of $8,436,772.50 with 43 timekeepers and rates of up
`
`to $1,120 per hour for a patent case that was resolved on motions is in my expert opinion multiple
`
`times higher than I usually see and higher than what the AIPLA data showed to be usual.
`
`23.
`
`The Report of the Economic Survey by AIPLA and the Real Rate Report by
`
`Wolters Kluwer have data that I have found to be accurate for charges and rates actually paid for
`
`patent litigation. Relevant pages are collected in Exhibit 5 for AIPLA.
`
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`
`- 11 -
`
`CASE N0.: 5:18—MD—02834—BLF
`CASE N0.: 5:18—CV—00767—BLF
`CASE N0.: 5:18—CV—05619—BLF
`
`AWN
`
`\OOO\10\
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 12 of 28
`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 12 of 28
`
`Estimated Total Cost of a Patent Infringement Suit - Non-Practicing Entity
`
`(P. I-161 to l-164, I-167 to l-170, Q47Ci-Q47Cp)
`.lst Quartile/3rd Quartile IMedian IMean
`
`3'
`
`u
`
`1“
`
`VI
`
`$10-$25 million at risk
`
`hmal use management
`8u
`
`d, discovery, motions, claim consu
`
`d, ore to post-trial,8 appeal il app
`
`Costofmediation *E
`
`lime than $25 million at risk
`
`Initialcase management *M
`
`d, discovery, motions, (him tons"
`
`s
`
`d, are (0 post-Inal,& appeal ll app
`
`— wI"
`
`8
`
`E sa
`
`E
`
`3‘
`
`a
`
`a
`
`E
`
`‘II
`
`‘3* E
`
`
`
`(0;!olmediation ‘ti
`
`
`
`50
`
`$1,”
`
`$2.000
`
`$3.000
`
`$4430
`
`$50M
`
`“M
`
`24.
`
`The 2019 Report of the Economic Survey for AIPLA provides the above overall
`
`costs3 data at page 58 for Non-Practicing Entities (NPE) with several amounts at risk.
`
`25.
`
`The same page lists the charges by phase for the initial case management,
`
`discovery, motions, claims construction, to trial and appeal as well as the cost of mediation for
`
`both sizes of NPE matters in all geographic areas:
`
`Thousands
`
`—mmmm—mmmm
`g 0 Enilllon‘rlii
`- Mflnilllon‘rlsk
`nmd use "mutant
`nit-d use "mutant
`SM!
`nd. d-suwery, motions. dam-must:
`nd, d-swverv, motions. clam mnstr
`$1.95
`ml. pie to post—Ind, 8. appear .i app
`Szm nd. pie to post-Ind. 8. appeal It app
`- to! meduat-cn
`l
`- tot mediation
`
`$99
`$1.0!)
`$1.150
`so
`
`SID
`$1M
`$5,000
`"
`
`5m)
`52.!!!
`54.50)
`II
`
`$20
`52.6!
`53475
`18
`
`
`
`$63
`$613
`sum
`50
`
`$30
`$2.000
`$1.500
`I
`
`5115
`$150
`90m
`‘-‘ I
`
`These totals are set out in more detail in the attached pages 1-144, I-l45, 1—162 and 1-163 of the
`
`2019 AIPLA Report in Exhibit 5.
`
`
`
`26.
`
`The last few iterations of the AIPLA reports have included information on the
`
`3 Total costs include legal and paralegal fees, local counsel fees, travel, court reporters, copies,
`courier services, exhibits, analytical testing, expert witnesses, translators, surveys, jury advisors
`and similar costs (AIPLA Report at page 50).
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`
`- 12 -
`
`CASE N0.: 5:18—MD—02834—BLF
`CASE N0.: 5:18—CV—00767—BLF
`CASE N0.: 5:18—CV—05619—BLF
`
`AWN
`
`\OOONQ
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 13 of 28
`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 13 of 28
`
`costs of defending claims by location for all matter and for NPE litigation. A comparison of pages
`
`I—145, 1-162 and 1—163 shows that the average costs are about 27 percent lower for NPE matters.
`
`($4,000,000 Page 1—145 vs. $2,900,000 Page I—l63 for >$25M disputes).
`
`27.
`
`The NPE mean/average inclusive of discovery, motions and claim construction for
`
`San Francisco is $1,625,000 for $10-$25 million at risk4 (1-162) and $2,900,000 for more than $25
`
`million at risk 0—163).
`
`28.
`
`Even the reduced Amazon request for 12,232.8 hours and $6,423,668.06 in fees
`
`and costs is an outlier as it is a multiple of respectively either 3.95 times or 2.22 times this NPE
`
`data and the litigation by Amazon may be “another agen ” or attorney “training” type of case in
`
`which far too many timekeepers were billed and much more than objectively reasonable time is
`
`presented for some unexplained reasons, but well beyond what is reasonable for the actual dispute.
`
`The heavy staffing by forty-three timekeepers from several offices and weekly team meetings (by
`
`as many as eleven timekeepers) and high rates for the standard (i.e., non-patent, less-technical
`
`legal work) contributed to this disparity.
`
`29.
`
`Based on the data in my Exhibit 2 spreadsheet, with respect to the 12,7832 hours
`
`billed by Fenwick after the initial invoices were discounted, which amounts to $7,166,318.69 in
`
`fees, as set forth “on the face of the invoices”, the hours and fees are allocated below over the
`
`categories of timekeepers as follows:
`
`Category
`
`Partner/Of Counsel
`
`Associate/Staff/Summers
`
`Hours
`
`Net Fees
`
`4,298.4
`
`$3,167,502.13
`
`7,487.3
`
`$3,651,170.39
`
`997.5
`
`Paralegal/Others
`
`$347,646.17
`
`Fees and rates by nineteen categories:
`
`30.
`
`The submitted charts OECF 592-7) have a column titled “Effective Rate With Final
`
`Discount” with different rates for each of the nineteen categories. Here is a composite snippet from
`
`the start and end of that chart:
`
`4 AIPLA Report at page 11: “’At risk’ refers to the financial impact of an adverse judgment.”
`DECLARATION OF EXPERT GERALD G.
`CASE N0.: 5:18—MD—02834—BLF
`KNAPTON ISO SUPPLEMENTAL BRIEF
`CASE N0.: 5:18—CV—00767—BLF
`CASE N0.: 5:18—CV—05619—BLF
`
`-13-
`
`auto
`
`\ooouax
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`23
`
`24
`
`25
`
`26
`
`27
`
`28
`
`

`

`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
`
`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 14 of 28
`
`
`
`
`Since they show a total of $6,100,000.00 at page 2 of the chart and that is the
`31.
`request in the motion by Amazon, I have used those “Effective Rate With Final Discount” average
`rates to calculate the charges by category in my Exhibit 3 which has this summary by category:
`
`
`
`
`
`
`
`
`
`This is fully set out in Exhibit 3, which follows the same order of the categories
`32.
`used by Amazon. The Time Chart submitted by Amazon has total fees by category on pages 2 to
`12 of ECF 592-7 but they use the higher “Effective Rate Before Final Discount” to calculate those
`totals of $6,987,341.17. This is not helpful. It seems to be an error, or at least is misleading. The
`“effective rate with final discount” is $887,342.56 less to reach fees of $6,099,998.61, an
`approximately 13% further “final discount.5” This is shown in Exhibit 8 at lines 31 to 35.
`The main timekeepers for each submitted category are the eight timekeepers (some
`33.
`of whom are the main timekeeper for more than one category) shown by a light-blue highlighting
`
`
`5 Mr. Gregorian at page 12, lines 12 to 23 of ECF 592-1.
`DECLARATION OF EXPERT GERALD G.
`KNAPTON ISO SUPPLEMENTAL BRIEF
`- 14 -
`
`
`
`CASE NO.: 5:18-MD-02834-BLF
`CASE NO.: 5:18-CV-00767-BLF
`CASE NO.: 5:18-CV-05619-BLF
`
`

`

`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 15 of 28
`Case 5:18-md-02834-BLF Document 644-1 Filed 10/30/20 Page 15 of 28
`
`l
`
`in Exhibit 3 and are here sorted by that color and listed in the same order of the categories with the
`
`96
`
`.r
`24%
`22%
`33%
`22%
`37%
`26%
`19%
`19%
`32%
`44%
`36%
`72%
`32%
`14%
`24%
`31%
`
`34%
`49%
`
`percentages of the time for each of the nineteen categories:
`'Hours
`' Rates
`' Fees
`'Level
`'Exp'
`Timekeeper
`Partner
`L5
`759,165. 76
`514.3 5 503.43
`Melanle Mayer
`Partner
`18
`Saina S. Shamilov
`31,576.50
`66.4 s 490.61
`Assoc
`10
`69,012.42
`133.6 5 516.56
`Phillip Haack
`Partner
`15
`18,397.44
`38.4 5 473.10
`Todd Gregorlan
`Assoc
`27.1 5 460.68
`12.48443
`Eliiabeth Hagan
`Partner
`38,941.94
`87.4 5 44556
`Melanie Mayer
`ASSOC
`41,740.63
`86.2 s 484.23
`Phllllp Haack
`Partner
`Saina S. Shamilov
`114,524.88
`202.9 s 564.44
`Partner
`47,385.39
`84.8 s 553.79
`Todd Gregorian
`TJ. FOX
`Assoc
`32,195.51
`67.0 S 48053
`ASSDC
`50,121.64
`118.] 8 424.40
`Phillip Haack
`Assoc
`7,715.93
`16.3 $ 473.37
`Chieh Tung
`Assoc
`166,657.16
`305.5 s 545.88
`Phillip Haack
`Assoc
`T.l. Fox
`188,596. 20
`390.0 3 48358
`Partner
`73,972.19
`133.0 s 555.43
`Melanie Mayer
`Assoc
`Kwan Chan
`210,753.56
`486.5 s 431.43
`Panner
`same 5. Shamllov
`61,401.01
`100.3 5 577.62
`Par