Today before we start our for arguments I have the distinct pleasure of moving for admissions to the federal circuit my three law clerks and I for that purpose when I make the motion judge Lynn will take over the gavel the three applicants and movement are very joy Valentine David Price and Jeffrey she formerly I moved the admission of Mary Joy Cox Valentine who's a member of the bar and good standing of the highest court of California and David Price who is a member of the bar and good standing of the highest court of California Jeffrey she who's a member of the bar and good standing of the highest court of Massachusetts which means that they pass the bar exam and are in good standing I have knowledge of the credentials they've worked with me for the past nine months and I've satisfied that they possess the necessary qualifications to be great members of this bar so I move their admission having newly considered your motions judge Garas I'm pleased to grant all three motions welcome and at this point I would ask that you address the clerk and for the oath of office ready right here you swear a firm that you report yourself and turning the council to this court I'll probably be reporting the law and you will support the Constitution of the United States of America congratulations and vote for the bar and I say for the future we welcome you and look forward to seeing you at the lectern in the near future very near future thank you thank you mr
. Orgley this morning we have four cases in a docket three of which will be argued and one submitted on the record for purposes of the record the submitted case is 075073 egg versus the US first case on oral argument is an international rectifier versus Samsung docket number 061585 Mr. Cook now I noticed that you have reserved eight minutes for your rebuttal time and I will be limited to issues raised on a appellees oral argument is that correct you ready are you familiar with the light system in this court I am very good proceed probably the most important point to emphasize in this case is the degree of risk and the degree of success that were achieved by I think it's the same something in this matter spring work in the hands of the case as established at the degree of success as a crucial factor in deciding in the degree of risk crucial factors in deciding the appropriate this and change you know on that point I was a little puzzled by the rely on some handsley simply because heavily involved the civil rights statute and it was a one-way fee shifting statute and here we've not got a federal statute at all it's a contract so I just I mean maybe right at the end of the day but I sort of puzzled by your reliance on henfully wondered if there were any California cases that sort of apply that principle to situations such as the contract here yes the McGinnis case is a 9th circuit case cited on page 5 or brief for the same proposition and there that was a private employee discrimination case where Mr. McGinnis had been fired to have cancer and was fired because it could perform as duties the court found district court found punitive damages under 200,000 was that did that case implicate a federal statute under a free fee shifting federal statute it must have probably soon we did now which is what henfully implicate it yes my question is why we should apply those principles in a case such as this which is not predicated on federal statutes such as 1980 but your contractual agreement right yes certainly as a matter of common sense if the there is a tremendous amount at risk and a loss and if the time available to amount of defense is short then the amount of resources that are applied and dedicated to that task certainly are reasonably going to be larger than they might be in other circumstances here the important thing remember is that there are nearly nearly a hundred million dollars worth of exposure to Samson and Ixas there is no guarantee that Ixas could pay that kind of damages but it wasn't just the monetary exposure was also the possibility Ixas and Samson being to join out of their respective businesses Ixas half of its MOSFET business Samson out of its founder business moreover the injunction was being construed to have extra torque to our phone will reach if the decision was upheld then the Samson's activities and career have been indicated and finally the party's recutations were at serious risk Ixas was on its way to trial in front of a jury on a printed case on these very patents and the fact that it might have been a found guilty of contempt would have been a very damaging fact and if it were permitted in jury trial Samson I'm saying token as its own reputation is staying so there was a tremendous amount of stake and the amount of money that was spent by both sides each less than two million dollars something that you were million and not only from the district court proceedings but also if you're going up on the emergency notice well you're you're asking that we in order the district court to grant the petition and fall I think that that would be reasonable okay well how would that I mean there's certain fees which I don't think the certain judgments by judge real that I'm not sure you took issue with necessarily like his discarding fees for file management expenses and press release so I'm a little you would have us forward attorney fees for those items even though I don't think you've specifically challenged his assertion in that regard you're talking about Samson the word judge you're right some of those we did not take issue because they were relatively small in the page and it's worth such as they were but if you look at the overall context of that of his award the item is that we found the most problem that were the things that were as a director's result in curative because of the amount of risk in a short time available you're right you did not challenge in this appeal so you would you don't really mean in full you mean in full minus perhaps some of the things that you didn't challenge and that you are drinking that right but I won't make a point that is that the parties agree these are sophisticated consumers of legal services they agreed that they were the prevailing party we would receive as attorneys they didn't say reasonable attorneys fees they could they didn't they didn't say attorneys fees bill and pay which they could if they didn't this is a contract question whether they meant attorney fees bill or pay or reasonable attorney fees is that causes to be construed by the courts is unknown and we we cited a case I should say I are cited in that's in it's pretty from the in case which County of Marin this is a and it says what the contract is susceptible to different interpretations the courts give it such a construction is to make it lawful operative definite reasonable and capable of being construed carried in effect if it can be done without violating the intention of parties here in the home purpose of this reasonably which I'm just attorney to cause was to eliminate that's for his location discourage for his information repeated disputes over what's reasonable the time to fit here is the second time is not productive for either parties it's reasonable to assume that what they were really interested in is minimizing that in that regard you know this is this case is a little frustrating in the sense that here we are the second time addressing this question of attorneys fees and normally those things are resolved with relatively little debate and my first question is as there been any effort is on the part of the parties to settle this yes there is and have those settlement efforts are they productive in any way or have you come to a complete loggerhead what one of the difficult is the settlement have always been on the settlement so the term fee clause that swept in with the merits of the infringement case that that case is a little bit less I understand I'm also a little frustrated in the sense that on the one hand it seems to me that judge reels actions were quite arbitrary on the other hand he was a little bit more specific this time around at least with respect to Samsung and did identify a number of things that several of which as a judge pros pointed out you haven't even challenged and in your reply I noticed in the appendix whatever response you filed in the district court to those specific itemized issues with respect to Samsung you reply in the appendix consisted of the first page and the signature page and nothing nothing in between so we're left without we're left without the argument and so it seems to me on the one hand we've got an action that is had some thinking anyway some thought some consideration and on the other hand actions that seem to be totally arbitrary and we're faced with this with this dilemma how we how we to resolve that I think it could be resolved by simply saying what the parties intended to and string contract between the consent of the attorneys these just now attorneys bill that's where a construction this clause is eliminated recently well under the California code of course there is a reason for this actor that has to be taken into consideration that's why I'm saying this would be very reasonable reason is that if the if the losing party simply pays what was built and paid that party made end up paying the end up paying 100% whatever was attributable to the to the issue but overall end up paying less than it would after retracted the appeal is the district court proceeding by the same token the prevailing party even though it might receive less overall but it would lose less because in this case as this case goes on and on and there's a certain portion of attorneys that won't be paid that eventually is going to eclipse substantial portion of the benefit of that clause in the first place mr. Curry reason I have one question relating to your request that we remove judge real from the remand if we remand the case yes according to the records at least there is another appeal that was documented yesterday by Ixas on the patent infringement matter that case is still pending before judge real that's correct what happens if we agree with you when remanded for another judge assignment that case first of all we are not asked for that for the infringement case to be assigned to a different judge in this for this matter that's not taken here that matter also is concluded in the district court and is only captured on appeal the matter of the appeal that was documented yesterday is simply a request to modify the injunction to permit Ixas delivered product to do a medical products company or life-saving purposes it's a very small modification of the injunction and as far as we know that's the last thing the judge reals had a new added contact with this denying that motion and we brought it up to this court so the other cases appear directly on appeal all right mr. Cook you've used up with substantial portion of your time we'll restore two minutes to the bottle just Morgan good morning I'm Nancy Morgan representing Anthony International Reckless by a corporation with me is Glen Trust and I'd like to start by addressing judge first first question regarding the application tensley to outside the civil rights context we agree with judge first we believe that this case is governed by California contract law and I'm circuit law and all of the cases that Ixas sites all involve civil rights plaintiffs where the degree of success was an issue for the prevailing plaintiff and we've cited a dozen or so contract cases where they don't get into the success portion is much Ixas is success is already accounted for but that they are the prevailing party and hence is started with first you find a reasonable fee and then once you've got a reasonable fee you may have fortunate with regard to the success that plaintiff has achieved in this case judge real is already determined for reasonable fee and that's the starting point for the sports analysis but shouldn't the judge be able to explain specifically on what basis the reason this analysis stands I mean if you take a look at the order he certainly didn't do that for exorcist's fee request he may have done some for Samsung but not for X's so how do we justify his particular basis of reason for this for starters judge real has been on the bench for 40 years he's in the best position he's allowed to rely on his experience as to what's a reasonable and what is not a reasonable here but he appears to have to have viewed Ixas as been having been pure and solely an intervener and you agree that's not correct right we do not agree that judge real has regarded Ixas so is an intervener because he's awarded them much more fees they've covered up I mean more than half a million dollars in fees and they didn't incur those he's solely as an intervener he found as an intervener they contributed in one regard that they deceived the double recovery argument and he awarded them his work covers the fees that they spent for that argument well he says that that's for X's it's only significant role was producing a central argument to reduce Samsung's contempt sanction that's certainly not correct well judge real found that as an intervener that was their contribution that they contributed the double recovery argument so the fee should be limited to the intervention we believe the fee should be affirmed that it's reasonable and covers fees beyond the intervention but how do we know what the basis judge real's rationale stands on for Ixas there was only two short paragraphs and two sentences basically one he speaks about their significant role in the central argument judge Lynn pointed to in the second paragraph contains it spends 48,000 fees opposing IR certificate and he disallows it red info we believe that the findings made in the initial part of the order would apply to the Ixas award as well he says but that applies to Samsung well he does say that the issues in the case from the beginning were few and this was a case that had two issues were Samsung and X's in contempt and if so what should the fine be so that covers the entire case not just Samsung where did the number of three hundred and one thousand one hundred and twenty five dollars and seventeen cents come from the that was his award and where where did that come from judge was a came after a consideration of all the factors he evaluated the novelty and the difficulty of the case whether there was a risk involved how difficult to and then and then he picked the number he picked a number from where just a knife not even around the question now is whether that number can be a verb and if you look to the case whether his actions are arbitrary or whether he's abused his discretion and making this this fee reduction and what should we look to to assess whether his actions were arbitrary or reasonable this court should look to see whether it can affirm the award based on the record the record but do we have to dig the record up and take a look at all of the bills and statements are submitted and determine whether or not they were considered by the lower court when he has no reference to the record specifically that he relied upon this court does not need to do that because judge real has already done that all this for me what where is it in his order where is it what is he point to it he claims that he reviewed 400 pages of statements yes but he doesn't point to any of the specificity in the statements is to how he arrives at the three hundred and one thousand dollars under the law of the night's circuit is not required to cite the specificity he's required to issue a reasonable fee award in how do we know it's reasonable would 250,000 be reasonable would five hundred thousand dollars be reasonable what's the measure what is the metric do we have to measure against well the stars are measured against our fees our fees are less than half of what they recovered that by itself should be reasonable you didn't have 96 million dollars at risk and a finding of contempt one thing to be on the on the on the offensive side and it's another to be on the defensive that is correct your honor but what we ask judge real to work nothing they asked judge real to work on everything he worded them a number between what we asked and what they asked and they did recover more than double our fees we can't start from nothing I mean you're entered into a contract that said that in connection with any enforcement action the loser pays attorneys fees what did what did what did that mean when you entered into that contract those issues were briefed in the prior deal so at this point I accept that Samsung and access are the prevailing parties based on this course prior order and there's a contractual agreement to shift fees so you don't start from zero seems to me you start with the fees that were actually billed and paid and then work from there and look at whether those fees were reasonable or not reasonable and the question is why wasn't that done in this case and it or perhaps I should restate it to question to me is wasn't done in this case and it doesn't look like it was judge real said he considered all the factors he looked at their bills he applied a method for calculating those fees that's been approved by the ninth circuit and but how do we know that how do we know to be applied all of the elements required by the ninth circuit the order says that he did he says he considered all the factors and the judge read judge real is not required to specify each factor this first precedent don't require that and I see some cases are cases he's not required to spell it out is required to come up with a reasonable fee but with a basis and understanding to be able to defend that as a reasonable fee he can't just pluck a number out of the air and say this is reasonable based on my 50 years of legal experience judge really evaluated he presided over the action he heard on the evidence he's reviewed the bills he did not take Ixiss's and Samson's requests as reasonable and that is not an abusive discretion they had 49 time keepers on this appeal I mean I'm excuse me on this case a case a issue case 49 lawyers or 49 time keepers 29 of them were lawyers they build over three million dollars for a case that had no discovery one two day hearing and their months were nothing happened that's not that is a reasonable or that's not an abusive discretion well what is reasonable about the nine fees where you apply for a shirt you apply for a shirt petition and they opposed it they spent $48,000 in opposing that certification judge real said that they said at no authority why it should recover those additional fees and denied them obviously is that a reasonable basis of denial is that Ixiss did not make the issue for the judge he's entitled to not award fees when they don't brief the issue brief it yes what do you mean by briefing it they do not provide the report any legal authority why they should recover the cert petition fees well in legal fees that they expended in opposing your cert petition what more do they need to prove the fact that they oppose your cert petition judge real ask them for a case law on why fees in opposing a cert petition would be recoverable and they did not give them any that's why they denied the cert fees but if you have an agreement which states specifically that the loser pays legal fees and when you lose you file a petition for cert is that all part of the same basis of objecting to the legal fees at that point in time when you pursue it to the final degree is that that part of the same case the it is part of the same case but the question is what's a reasonable fee they did not brief the cert issue to the court and they're not entitled to recover everything they raised the issue with the court they might not have had any support any legal support for it but it's so part of the same legal case that's going forward I mean if you would not file a cert petition they would have had the opposite so they wouldn't have it incurred any legal fees they would pose the petition we did not oppose their request to be paid their fees for cert but the judge denied it on what basis is their reasonable basis we don't know do we the court from the northern district in California and on me said it was reasonable to not award fees when party does not provide legal authority explaining why those fees should be recovered they also asked to cover their fees for press releases well what what what legal authority was necessary there was there was I mean there's no debate there was a contractual undertaking here for a fee shifting and certainly there's there is a debate about the reasonableness of the fees that's what we've been talking about but legal fees and an enforcement action are legal fees and an enforcement action and if that action includes in part a petition for certiorari to the Supreme Court why is that any different than an appeal to this court or any of the proceedings at the district court what legal authority is necessary and what legal authority was it that judge real was calling for it's not reasonable this he was going to some authority as to why an attorney fee claim extends to an appeal to the Supreme Court well that's been an issue that courts have decided so it has been brief in some courts just not this one which seems to me if anything it was your obligation to cite some authority as to why that's not part of the legal fee in this case we didn't oppose it if judge real had awarded them their cert petition fees we would not have opposed that but when a party has a contract that does not mean that all fees are recoverable the law permits a reasonable attorney's fee and mr. Cook brought that there was a contract and that under a dependence arguments whenever there's a contract all the fees get paid as opposed to a reasonable fee and we decided case after case where the parties had contracts diamond moustache of meldick and the fees will reduce 28% 70% 50% in the diamond which is the ninth circuit case involving a contract the the prevailing party got $807 and the court for real said well we're gonna affirm this that that's not an abusive discussion the standard for an abusive discretion is whether the award is clearly wrong in this case given the simplicity of the case and the amount of people like since Samsung had on it and they've been working jointly together this is not an unreasonable award I mean they've recovered one over a million two hundred thousand dollars that that's not unreasonable that's a very reasonable award and I'm just as not said to any cases to the contrary the current factors apply here the night the night the night the characters and the California factors are pretty much the same so they would apply in this particular case we have no objection to a location of the part actors thank you thank you just one day of the more questions thank you first the cook you have five minutes see if I can run through my points first of all it's more than mentioned and we're apportionated and said that was really what changed real story no this is not an apportionated case frankly in the case is an apportionate the two are cases and apportionate these were cases where not all of the claims were subject to an attorney period or here are all of the claims of subject to an attorney if you work there's no question that question is only the reason of this issue if you accept the analysis of what attorney for you means that's not an apportionated issue here there was 100% success on all claims in the case and therefore the portion of the one doesn't apply next point 49 time keepers if you look through the the bills you'll see that there is four or five main attorneys for each side Samsung and I exist these 49 time keepers the amount of time spent by other people is a small principle attorneys and risk court attorneys also the point that judge real applied is to defend the judgment come up with the same cell or the Ixas if you look at the objections that I are final and map it to judge real's award he simply went through and recited what their objections were and some of them we didn't make any sense at all or example one of the entries was it was too much I object it was too much for or Samsung to spend $100,000 on the content motion that if you add up the numbers of all the things that he recited in his award in their objections if what he's done instead of adopting a reasonable value for what they should have spent on the organization he simply deducted the whole 100% so his and his Samsung award shows absolutely shows the opposite and reasonable valuation of the other simply imperative back the objections and that that $100,000 issue that's typical it appears in other entries where the objection has to the total amount appears to eliminate the entire amount except he coming up with something that's reasonable if we go through the entire analysis that he did do on Samsung is there a way to calculate how we came up with the $550,000 figure I don't think I did they've seen their total objections seeing close to but it was when it was $150,000 and that's or shoes that's the score of or shoes that was the number that he came up with first time the last to be a correct one but the point on the Samsung thing is that if he had been specific if you look at like Judge Posler's attorney fee award or seven circuit you're sitting in the seven circuit and actually made him a attorney fee award he said enough so not for doing the work you can see there he went through specifics and he made specific deductions judging him he really didn't explain his deductions and he didn't come up with a calculation and and this Morgan says well I doesn't necessarily I don't see how you can review this decision if he hasn't made some connection between the numbers I think this even the Samsung award it's got numbers and it still is Mr. Cook the due objective the order that was submitted by the other attorneys by IR attorneys to the judge is being a fine order I'm sure they submitted the draft they sent you a copy of it yeah in the direct to it the central district rules only permit you objective form not to substance and the form the rules of formers fell out in local rules except the number of paragraphs very limited you don't have an opportunity to object on the merits well I notice that the paragraph from that number specifically especially the final final aspects to it and the final order itself still contains the attorney's signature is that normal one central circuit in the central district no it is not they don't exactly be mem hardware thank yo