Court Awards Defendants $2.8 Million In Computer-Assisted Review Fees

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Gabriel Technologies Corp., et. al, v. Qualcomm Inc., et. al, 08CV1992 AJB MDD, 2013 WL 410103 (S.D. Cal. Feb. 1, 2013).

On February 1, 2013, District Judge Anthony J. Battaglia for the Southern District of California awarded the prevailing parties over $12.4 million in attorneys’ fees; $2.8 million of which were related to fees generated from “computer-assisted, algorithm-driven document review” and almost $392,000 for contract attorneys to review the documents that the algorithm determined were responsive.

Gabriel Technologies Corp. v. Qualcomm Inc. involves a four-year patent and breach of contract issue, which ultimately ended after the court granted Defendants’ motion for summary judgment.  Although the plaintiffs are currently appealing the judgment, the defendants filed a motion for attorneys’ fees, which were partially generated by counsel’s use of an e-discovery vendor’s predictive coding platform and the hiring of contract attorneys to review the documents.

After an analysis of the current state of the law involving attorneys’ fees, the Court concluded that Plaintiffs’ claims were “objectively baseless and brought in subjective bad faith[;]” thus, the court was inclined to classify the case as exceptional under 35 U.S.C. § 285 and an award of attorneys’ fees was proper. In ruling on whether the amount of fees the defendants requested was reasonable, Judge Battaglia noted the e-discovery process and methods used by the defendants:

“Over the course of this litigation, Defendants collected almost 12,000,000 records—most in the form of Electronically Stored Information (ESI)… Rather than manually reviewing the huge volume of resultant records, Defendants paid [an e-discovery vendor] to employ its proprietary technology to sort these records into responsive and non-responsive documents…The [e-discovery vendor’s computer-assisted review] algorithm made initial responsiveness determinations for more than one million documents.”

The responsive documents were then reviewed by contract attorneys “for confidentiality, privilege, and relevance issues.” The court stated further that “the review performed by [the e-discovery vendor] and [the contract attorneys] accomplished different objectives with the [e-discovery vendor’s] electronic process minimizing the overall work for [the contract attorneys].”  Therefore, the court held that Defendants’ counsel’s “decision to undertake a more efficient and less time-consuming method of document review [was] reasonable under the circumstances” and the Defendants were entitled to fees for both the algorithm and for human review as part of an overall award of $12,401,014.51.

If you or your company has any questions or concerns regarding fees generated as a result of e-discovery, or any other e-discovery related issue, contact James G. Ryan at jryan@cullenanddykman.com or via his direct line at (516) 357-3750.

A special thanks to Sean R. Gajewski, an associate at Cullen and Dykman LLP, for help with this post.