Calculating Fee Awards

By Dennis Crouch

I reported earlier on a $6.6 million attorney fee award reinstated by the Supreme Court. To find out more about that decision, I pulled up the district court’s accounting opinion. Checkpoint Systems, Inc. v. All-Tag Security S.A., 2011 WL 5237573 (E.D. Pa 2011).

It turns out that the award provides $2.4 million to All-Tag Security and $4.2 million to Sensormatic.

All-Tag Sensormatic
Attorney’s Fees $1,607,507 $3,148,966
Expenses $191,127 $336,762
Pre-judgment Interest $633,570 $805,877


Under 35 U.S.C. § 285, a judge may only award “reasonable attorney fees.” That reasonableness was defined somewhat by the Federal Circuit in its Central Soya decision where it held that the purpose of the fee award is “to compensate the prevailing party for its monetary outlays in the prosecution or defense of the suit.” However, following Octane Fitness, that statement has likely lost power as a limitation on district court discretion. The basic approach known as the “lodestar” method calculates attorney fees based upon the number of hours worked times a reasonable hourly rate. That total is then reduced by excluding charges that are “excessive, redundant, unnecessary or otherwise not reasonably expended.”

Here, one challenge that the losing party brought to fee calculation is that the defendants included all of their attorney fees – including fees associated with losing arguments. However, the district court rejected that argument – finding that the plaintiff should even pay those fees since it brought the objectively unreasonable lawsuit.

When this case was appealed, the Federal Circuit reversed the fee decision – finding that the case was not exceptional because the lawsuit was not objectively unreasonable. The Supreme Court has changed that standard – now making it easier to award fees even if the lawsuit itself was not objectively unreasonable. The Federal Circuit will next look to re-judge whether the fee award was proper.

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

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