Free Memorandum - District Court of Arizona - Arizona

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Martin W. Schiffmiller KIRSCHSTEIN, OTTINGER, ISRAEL & SCHIFFMILLER, P.C. 489 Fifth Avenue, 17th Floor New York, New York, 10017 Telephone: (212) 697-3750 James W. Armstrong (No. 009599) SACKS TIERNEY P.A. 4250 North Drinkwater Blvd., 4th Floor Scottsdale, Arizona 85251-3647 Telephone: (480) 425-2600 [email protected] Attorneys for Defendant Del Laboratories, Inc. UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Lemelson Medical, Education & Research Foundation, Limited Partnership, No. CIV'00-0661-PHX-HRH Plaintiff, v. Alcon Laboratories, Inc., et al., Defendants. Del Laboratories, Inc., Counterclaimant, v. Lemelson Medical, Education & Research Foundation, Limited Partnership, Counterdefendant. In accordance with Rule 54.2(c)-(d) of the Local Rules of Civil Practice of the United States District Court for the District of Arizona, Defendant Del Laboratories, Inc. ("Del") hereby submits the following Memorandum and attached documentation in support of its February 15, 2006 Motion for Award of Attorneys' Fees and related nontaxable expenses which Del was forced to incur in its successful defense of this
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MEMORANDUM IN SUPPORT OF DEFENDANT DEL LABORATORIES, INC.'S MOTION FOR AWARD OF ATTORNEYS' FEES

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longstanding patent infringement case brought by Plaintiff Lemelson Medical, Education & Research Foundation, Limited Partnership ("Lemelson"). As discussed below, this case clearly qualifies as "exceptional" within the meaning of the statute providing for attorneys' fees in patent disputes, 28 U.S.C. § 285, and Del consequently respectfully requests that it be awarded the reasonable total sum of $28,512.51 as a prevailing party. I. ELIGIBILITY A. The Judgment

Del seeks an award of attorneys' fees and related non-taxable expenses in connection with the Judgment entered February 2, 2006, granting Lemelson's Motion To Dismiss and dismissing this action in its entirety as to all defendants. The Court's Order of Dismissal entered February 1, 2006 expressly provided that the terminated Defendants, including Del, could proceed with motions for attorneys' fees in accordance with Local Rule 54.2. B. The Applicable Statutory Authority

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Section 285 of Title 35, United States Code, provides that, with respect to patent infringement actions: "The court in exceptional cases may award reasonable attorney fees to the prevailing party." The Court having dismissed all of Lemelson's patent infringement claims with prejudice, Del and the other Defendants are clearly the prevailing parties in this action. See Interstate Forging Indus. v. Federal Forge, Inc., 1998 U.S. Dist. LEXIS 8760, at *7-*8 (W. Dist. Mich. June 8, 1999). C. The Nature of the Case

This lawsuit is one of five simultaneously filed in the District of Arizona by Lemelson six years ago, on April 4, 2000. As amended, Lemelson's Complaints accused hundreds of companies of infringing various patents issued to the late Jerome H. Lemelson in the early 1990s, for which Lemelson claimed the benefit of the filing dates of two patent applications submitted by Mr. Lemelson to the U.S. Patent and Trademark office in 1954 and 1956. According to Lemelson, those patents purportedly encompassed bar code scanners and similar "machine vision" equipment like that developed and sold
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by manufacturers such as Symbol Technologies, Inc. ("Symbol") and Cognex Corporation ("Cognex"). Rather than sue Symbol, Cognex or any other manufacturers, however, Lemelson's lawsuits in Arizona targeted those manufacturers' customers, like Del, which had no role in either making or designing the scanning technology at issue. Accordingly, Lemelson's claims of infringement in the instant lawsuit were based merely upon the Defendants' use of bar code scanners and/or similar systems in the routine course of operating their unrelated businesses. Fortunately, however, prior to the commencement of the Arizona lawsuits, and in response to letters sent by Lemelson to their customers alleging infringement, Symbol and Cognex filed their own actions against Lemelson in the District of Nevada, seeking a declaratory judgment that, inter alia, Lemelson's patents were invalid or unenforceable under the equitable doctrine of prosecution laches. See Symbol Technologies, Inc. v. Lemelson Med., Educ. & Research Found., Ltd. P'ship, No. CV-N-99-00397 (D. Nev. filed July 21 1999); Cognex Corp. v. Lemelson Med., Educ. & Research Found., Ltd. P'ship, No. CV-N-99-00533 (D. Nev. filed Sept. 27, 1999). In light of the long prior pendency of these manufacturer declaratory judgment actions, which were later consolidated before the Nevada District Court on March 21, 2000,1 Del and numerous other Defendants moved to stay the instant lawsuit in October 2000, pending a final determination of the validity of the same "bar code" and "machine vision" patents at issue here in the Nevada litigation.2

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See Symbol Technologies, Inc. v. Lemelson Med., Educ. & Research Found., Ltd. P'ship, 301 F. Supp.2d 1147, 1150 (D. Nev. 2004). Prior to submitting its stay motion Joinder on October 27, 2000, Del filed an Answer on October 2, 2005, denying any liability on the infringement claims asserted in Lemelson's First Amended Complaint, together with a Counterclaim seeking declaratory and injunctive relief based upon the invalidity and unenforceability of Lemelson's patents. The Court later permitted Lemelson to amend its Complaint one further time, without requiring the Defendants to submit additional answers. Lemelson's Second Amended Complaint was filed on December 13, 2000. Both Del's and Lemelson's pleadings also alleged that attorneys' fees were awardable under 35 U.S.C. § 285. -3Document 539 Filed 04/03/2006 Page 3 of 15
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In its November 6, 2000 Response to the Defendants' stay motions, Lemelson conceded that it made "little sense, as a matter of judicial administration or cost to the parties, to litigate parties, to litigate this case in parallel with the other actions." Accordingly, on January 5, 2001, the Court ordered that "this action is stayed pending the entry of a final non-appealable judgment in the Symbol/Cognex litigation currently pending in the United States District Court for the District of Nevada." The Court further ordered that the parties should notify it when such a judgment was entered, at which time further orders would be made. Meanwhile, following extensive pretrial proceedings and an interlocutory appeal to the Federal Circuit, the consolidated Symbol/Cognex litigation was tried before the Nevada District Court from November 18, 2002 through January 17, 2003. 301 F.Supp. 2d at 1150. After five and one-half months of additional post-trial briefing, the Nevada court entered its final judgment on January 23, 2004, concluding (among other holdings) that Lemelson's alleged patent rights had been forfeited under the equitable doctrine of prosecution laches. 301 F.Supp. 2d at 1154-57. Thus, as explained by the district court: The defense of prosecution laches was first recognized in the patent context nearly 150 years ago in Kendall v. Winsor, 62 U.S. 322, 21 How. 322, 16 L.Ed. 165 (1858). In Kendall, the Supreme Court held that a person "may forfeit his rights as an inventor by a willful or negligent postponement of his claims, or by an attempt to withhold the benefits of his improvement from the public until a similar or the same improvement should have been made and introduced to others." Id., 62 U.S. at 329. Sixty-five years later, in Woodbridge v. United States, 263 U.S. 50, 44 S.Ct. 45, 68 L.Ed. 159 (1923), and Webster Electric Co. v. Splitdorf Electrical Co., 264 U.S. 463, 44 S.Ct. 342, 68 L.Ed. 792 (1922), the Supreme Court applied the defense of prosecution laches to prevent the applicant from deliberately delaying the issuance of a patent solely to increase its commercial value, and to prevent a patent applicant from unreasonably postponing the time when the public could enjoy the free use of an invention. Symbol/Cognex, 301 F.Supp.2d at 1154. In applying these standards to the evidence introduced at trial, the Symbol/Cognex court found that: Lemelson's 18 to 39 year delay in filing and prosecuting the asserted claims under the fourteen patents-in-suit after they were first purportedly disclosed in the 1954 and 1956 applications was unreasonable and unjustified and
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that the doctrine of prosecution laches renders the asserted claims unenforceable against Symbol and Cognex. The first patent based on Lemelson's 1954 application issued in 1962, and the first patent based on Lemelson's 1956 application issued in 1963. From that point forward, the public was entitled to assume that what was not claimed was dedicated to the public. 301 F.Supp.2d at 1155-56 (citations omitted) (emphasis added). The Nevada District Court further found that the evidence "strongly supported" the following combination of factors asserted by the plaintiffs in support of their prosecution laches claim: (1) Mr. Lemelson's original disclosures were made public in the 1960's and those patents expired by the 1980's; (2) before the asserted claims were filed numerous articles and patents describing machine vision and bar code scanning were published, and commercial products were developed and marketed; (3) Mr. Lemelson was aware of the developments in the machine vision and bar code fields, and yet he still waited; (4) Mr. Lemelson systematically extended the pendency of his applications by sitting on his rights, and sequentially filing one application at a time so that he could maintain co-pendency while waiting for viable commercial systems to be designed and marketed; and (5) Mr. Lemelson (and his new counsel [including those who filed the Arizona lawsuits]) then drafted and prosecuted hundreds of new claims in the late 1980's and 1990's specifically worded to cover those commercial systems. 301 F.Supp.2d at 1156 (emphasis added). The Nevada court also noted that of the five million patents issued in the United States between 1914 and 2001, Lemelson patents held the top thirteen positions for the longest prosecutions, and that "[s]ome of the claims asserted by Lemelson in this case will not expire until 2011, fifty-five years after the 1956 application was filed and forty-eight years after the application issued as a patent." Id. Moreover, Lemelson's "culpable neglect" in ignoring "the duty to claim his invention promptly" resulted in a "prejudicial effect ... suffered by the public, and privately by Symbol and Cognex and others, which were denied the ability to distinguish that which is claimed by Lemelson from that which is not." Id. Accordingly, the court aptly

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concluded that "[i]f the defense of prosecution laches does not apply under the totality of circumstances presented here, the Court can envision very few circumstances under which it would." Id.
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Prosecution laches acts to protect the public by forcing patentees to file patent claims in a timely manner. Beyond the extraordinary delay presented here, the record also shows that Lemelson effectively extended his patent monopoly by maintaining co-pendency for nearly forty years through continuation practice, and added new claims to cover commercial inventions in the marketplace years after his original patents had expired. This is precisely the type of prejudice to the public which the equitable doctrine of prosecution laches is designed to guard against. Symbol/Cognex, 301 F.Supp.2d at 1157 (citations omitted). Lemelson subsequently appealed the district court's decision to the Federal Circuit, which in an opinion issued on September 5, 2005 affirmed the holding that Lemelson's asserted patents were unenforceable under the prosecution laches doctrine. Symbol

Technologies, Inc. v. Lemelson Med., Educ. & Research Found., Ltd. P'ship, 422 F.3d 1378 (Fed. Cir. 2005).3 Specifically, after first explaining that because there may be several "legitimate" reasons for refiling a patent application, the doctrine should be used "sparingly" and "only in egregious cases of misuse of the statutory patent system," the Federal Circuit found that Lemelson's conduct met this strict standard: [R]efiling an application solely containing previously-allowed claims for the business purpose of delaying their issuance can be considered an abuse of the patent system. * * * In particular, multiple examples of repetitive refilings that demonstrate a pattern of unjustifiably delayed prosecution may be held to constitute laches. Taken singly, the delay in the prosecution on any one particular application will surely not appear to merit relief by the courts in equity. On the other hand, an examination of the totality of the circumstances, including the prosecution history of all of a series of related patents and overall delay in issuing claims, may trigger laches. The district court here heard considerable evidence that that was what occurred in this case. * * * The court also found that Lemelson had engaged in "culpable neglect" during the prosecution of these applications and it recognized the adverse effect on businesses that were unable to determine what was patented from what was not patented. * * * Under those circumstances, we can hardly conclude that the court abused its discretion in holding the involved patents unenforceable ... . The court

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The district court also held in the alternative that the plaintiffs' machine vision and bar code scanning products did not infringe Lemelson's patent claims, and that those claims were otherwise invalid for lack of a "written description" and enablement under 35 U.S.C. § 112. These additional holdings were not addressed by the Federal Circuit in Lemelson's appeal, given the appellate court's finding that the district judge did not abuse his discretion in applying the prosecution laches defense. Symbol/Cognex, 422 F.3d at 1386.
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thoroughly examined the facts and the equities, and it exercised its discretion reasonably. 422 F.3d at 1385-86 (citations omitted) (emphasis added).4 D. Legal Authority Governing Standard of Eligibility for Attorneys' Fees

The Court of Appeals for the Federal Circuit, which has exclusive jurisdiction over all appeals from patent infringement cases under 28 U.S.C. § 1295, has consistently held that fees may be awarded to prevailing accused infringers in patent cases, like Del, when the case may be deemed "exceptional" under § 285. Such "exceptional cases" include those involving bad faith. Mathis v. Spears, 857 F.2d 749 (Fed. Cir. 1988). In Eltech Systems Corp. v. PPG Industries, Inc., 903 F.2d 805, 811 (Fed. Cir. 1990), the Federal Circuit held that "there is and should be no difference in the standards applicable to patentees and infringers who engage in bad faith litigation" for purposes of establishing the prevailing party's entitlement to an award of attorneys' fees. Thus, an award of fees against a patentee who prosecutes a bad faith or poorly grounded infringement action is as appropriate as an award against an infringer who acted willfully and raises non-meritorious defenses to an infringement claim. II. ENTITLEMENT The courts have recognized that circumstances other than inequitable conduct (e.g., fraudulent misrepresentation) in the procurement of a patent may support a finding that a case is "exceptional" for purposes of a fee award to a prevailing patent defendant. Standard Oil Co. v. American Cyanamid Co., 774 F.2d 448, 455 (Fed. Cir. 1985) ("Other exceptional circumstances include ... misconduct during litigation, vexatious or unjustified litigation, or a frivolous suit."); Hughes v. Novi American, Inc., 724 F.2d 122 (Fed. Cir. 1984); see generally DONALD S. CHISUM, CHISUM ON PATENTS

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Later, on panel rehearing, the Federal Circuit amended its opinion to extend the district court's laches holding of enforceability of the 76 patent claims asserted by Lemelson to all of the claims contained in the 14 patents at issue. Symbol Technologies, Inc. v. Lemelson Med., Educ. & Research Found., Ltd. P'ship, 429 F.3d 1051 (Fed. Cir. 2005). -7Document 539 Filed 04/03/2006 Page 7 of 15

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§ 20.03[c][iii][B] (1997). A patent owner who is "manifestly unreasonable in assessing infringement, while continuing to assert infringement in court, ... whether grounded in or denominated wrongful intent, recklessness or gross negligence," may be deemed to have brought a baseless suit or engaged in bad faith litigation, justifying a fee award under § 285. Eltech Systems, 903 F.2d at 811. Indeed, as observed by the Federal Circuit in View Engineering Inc. v. Robotic Vision Systems Inc., 208 F.3d 981, 986 (Fed. Cir. 2000), "[a] patent suit can be an expensive proposition. Defending against baseless claims of infringement subjects the alleged infringer to undue costs ... ." Here, as discussed above, this action was one of five simultaneously filed by Lemelson against no less than several hundred defendants, including many of the largest industrial companies and retail firms in the United States. These suits alleged that activities which these companies had engaged in routinely for years and even decades, such as the universal use of bar code scanners and other "machine vision" equipment infringed between 8 and 16 of Lemelson's still-active United States patents. Obviously, because the activities, processes and equipment uses accused by Lemelson of infringement are prevalent throughout the production, quality control, warehousing, shipping, selling, and other routine operations of Del and the other defendants, the potential damages if the defendants were found liable for infringing Lemelson's patents were enormous. The only reason that Lemelson was able to assert that the practice of technology which had been in the marketplace for decades prior to the filing of this action in April 2000 could still infringe Lemelson's unexpired patents was because of the deliberate, systematic delaying by Lemelson or its predecessors of the issuance of its patents for as long as 18 to 39 years from the filing thereof. Moreover, during these deliberately extended patent prosecutions, Lemelson amended the claims of the original 1954 and 1956 patent applications to capture within their scope newly developed technologies such as laser bar code scanning.

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It was precisely Lemelson's policy of stretching out patent prosecutions so that the ultimately issued patents would extend much farther into the future and capture more valuable technology within their scope that led to the invalidation of all the suit patents by the trial court in the Symbol/Cognex case, affirmed by the Federal Circuit. Thus, the Lemelson patent portfolio that enabled it to launch a wide-ranging assault on a good portion of American industry, seeking to reap fantastic financial rewards in royalties for the practice of inventions never actually made by Jerome Lemelson (the named inventor) was grounded in inequitable conduct and unfair dealing from the outset. This is why the courts did not hesitate to apply the equitable prosecution laches doctrine to invalidate every claim of all 16 Lemelson patents in suit. Not only were Lemelson's actions against Del and the hundreds of other defendants based substantively on patents that should either never have issued or should have expired decades earlier, but the manner in which Lemelson proceeded to seek enforcement is also a proximate cause of the legal expenses incurred by Del for which it now seeks reimbursement. Lemelson was already engaged in litigation in Nevada on the same patents at issue in this action with two of the largest manufacturers of bar code scanning equipment, and those accused infringers had already raised the issue of prosecution laches, before Lemelson brought its "mass tort" actions in this Court. Rather than litigating the validity and infringement issues against the parties responsible for producing much of the allegedly infringing devices until a resolution of those issues was reached, Lemelson proceeded to sue hundreds of "innocent bystanders" like Del and claim that their longstanding use of "machine vision" equipment and methods infringed still-active patents. The defendants in this Court were faced with the potential of

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astronomical damages or royalties if Lemelson prevailed, and many of them settled out by taking royalty-bearing licenses rather than risking being held infringers. Del and the remaining defendants refused to do so, however, and incurred substantial expenses in resisting Lemelson's poorly grounded and unfair lawsuits.

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All of these circumstances overwhelmingly support Del's entitlement to an award of its attorneys' fees and related non-taxable expenses under 35 U.S.C. § 285. Indeed, even Lemelson itself asserted in its Amended Complaints that this litigation met the "exceptional case" standard of Section 285, and the Nevada District Court in the parallel Symbol/Cognex proceedings likewise convincingly reasoned that: "To characterize this case as 'exceptional' in terms of the exhaustive history of the Lemelson patents-in-suit and the equally exhaustive record adduced at trial, including pre- and post-trial briefing, would be an understatement." 301 F.Supp. 2d at 1167 (emphasis added).5 III. REASONABLENESS OF REQUESTED AWARD As set forth in the Task-Based Itemized Statements of Attorneys' Fees and Related Non-Taxable Expenses (Exhibits D and F hereto), Del seeks a total award of $28,512.51 for the amounts it has been charged by the two law firms which successfully represented it throughout the six-year duration of this litigation. For the reasons discussed below and in the attached Affidavit and Declaration by Del's moving counsel (Exhibits C and E hereto), the award requested by Del is entirely reasonable. A. The Time and Labor Required by Counsel

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The amount of time for which Del seeks an award of attorneys' fees totals 94.95 hours. 32.75 hours were expended by Del's lead patent counsel in New York,

Kirschstein, Ottinger, Isreal & Schiffmiller, P.C., and 62.20 hours were expended by Del's local Arizona counsel, Sacks Tierney P.A. To avoid duplication of effort, Sacks Tierney and the Kirschstein, Ottinger firm carefully coordinated and divided the tasks each would perform on Del's behalf in defending the patent infringement claims alleged by Lemelson. Thus, for example, Kirschstein, Ottinger was almost entirely responsible for preparing Del's detailed eight-page Answer to Lemelson's Complaint, Affirmative Defenses, and Counterclaim that was filed on October 2, 2005, while Sacks Tierney took

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Only Lemelson requested attorneys' fees under Section 285 in the Symbol/Cognex case (the plaintiff manufacturers did not), so no fee award was made (even though the case was found "exceptional") because Lemelson was not the prevailing party. 301 F.Supp. 2d at 1167. - 10 Document 539 Filed 04/03/2006 Page 10 of 15

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the lead in drafting all of the various motion papers submitted by Del during this lawsuit, with research and drafting assistance from Kirschstein, Ottinger on pertinent issues of patent law. This motion work included drafting Del's Joinder in the successful motions to stay this case pending a final decision in Symbol/Cognex, preparing Del's Response to Lemelson's Motion to Dismiss this case following the Federal Circuit's final ruling in Symbol/Cognex, and drafting Del's Motion for Award of Attorneys' Fees and related papers.6 Sacks Tierney also expended necessary time in advising Kirschstein, Ottinger on the Arizona District Court's Local Rules of practice and procedure, and in monitoring and reviewing the hundreds of pleadings, motions, orders and other filings made in this lawsuit over the past six years. Kirschstein, Ottinger likewise expended additional time in monitoring the progress of the Symbol/Cognex litigation, in reviewing the patents at issue in this case, and in preparing its own supporting fee documentation. It must also be emphasized that the joint strategy of the moving Defendants (including Del) to stay the instant lawsuit until the validity of Lemelson's patents was determined in the Symbol/Cognex proceedings saved substantial time, effort and attorneys' fees that would otherwise have been wasted if the parties had been forced to litigate the "merits" of Lemelson's infringement allegations. The time and labor

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expended by Del's attorneys were therefore both reasonable and necessary to Del's successful defense of this case. B. The Novelty and Difficulty of the Questions Presented

Because of the successful stay strategy employed by Del and the remaining Defendants, there were no particularly "novel" or "difficult" questions that needed to be resolved in this case. This strategy, however, greatly reduced the amount of attorney

"In statutory fee cases, federal courts, including [the Ninth Circuit], have uniformly held that time spent in establishing the entitlement to and amount of the fee is compensable." In re Nucorp Energy, Inc., 764 F.2d 655, 659-60 (9th Cir. 1985). - 11 -

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time incurred by Del, as reflected in the relatively small sum it seeks to recover. Moreover, although the "merits" of Lemelson's patent infringement claims were never reached, Del's efficient motion strategy required it to incur attorney time researching and drafting various issues concerning the stay, the dismissal of this case under Rule 41(a)(2) of the Federal Rules of Civil Procedure, and Del's entitlement to a fee award under 35 U.S.C. § 285. C. The Skill Requisite to Perform the Legal Service Properly

The attorneys retained by Del in its defense of this action have significant litigation, intellectual property and patent law experience which was instrumental in obtaining the dismissal of Lemelson's claims. Indeed, a better result could not have been achieved. D. A Preclusion of Other Employment by Counsel Because of the Acceptance of the Action

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The agreement of Sacks Tierney and Kirschstein, Ottinger to work on this lawsuit clearly required them to devote time that could have been spent on other matters where there was a more legitimate dispute. Moreover, this lawsuit would not have been

necessary at all if Lemelson had simply waited until a final outcome was reached in the Symbol/Cognex litigation before targeting the Defendants here. E. The Customary Fee Charged in Matters of the Type Involved

As explained in the attached Affidavit of James W. Armstrong and Declaration of Martin W. Schiffmiller, the fees charged by their respective firms were consistent with or below those customarily charged for matters of this type in the Phoenix and New York legal communities. F. Whether the Fee Contracted Between the Attorney and the Client is Fixed or Contingent

As discussed in Mr. Schiffmiller's Declaration, Del agreed to compensate Kirschstein, Ottinger on a fixed hourly rate basis for its work on this case. As explained in Mr. Armstrong's Affidavit, Del also agreed to compensate Sacks Tierney on a fixed
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hourly rate basis, subject to adjustment under the factors specified in E.R. 1.5 of the Arizona Rules of Professional Conduct. G. Any Time Limitations Imposed by the Client or the Circumstances

The defense of this case did not involve strict time limitations beyond those set forth in the Federal Rules of Civil Procedure and the Local Rules of this Court with respect to the filing of pleadings and motion papers. The sheer length of this case, however, and the need to monitor all intervening events, did increase the amount of attorneys' fees incurred. H. The Amount of Money, or the Value of the Rights, Involved, and the Results Obtained

In its Amended Complaint, Lemelson accused each of the Defendants in this case with having willfully infringed over the preceding six years (and continuing to infringe) a total of thirteen patents purportedly encompassing bar code scanners and similar "machine vision" equipment used by the Defendants in the normal course of their businesses. In addition to injunctive relief, Lemelson's Complaint further sought an award of treble the damages purportedly caused by the Defendants' "deliberate" infringements, as well as the recovery of Lemelson's attorneys' fees under 35 U.S.C. § 285. Although Lemelson's Complaint did not specify the amount of treble damages it was seeking, given the massive scope of the infringements it alleged, the potential liability was clearly in the millions of dollars, and the injunction Lemelson sought would have seriously jeopardized Del's business operations. The dismissal of Lemelson's lawsuit in its entirety therefore represented the best possible result for Del. I. The Experience, Reputation and Ability of Counsel

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Sacks Tierney is a respected law firm in the state of Arizona and has a welldeserved reputation for quality work, client service, and reasonable fees. The

Kirschstein, Ottinger firm has a similarly excellent reputation in the state of New York, where it is particularly well known for its work on patent matters. Both firms have a great deal of experience in civil litigation in both state and federal courts. The specific
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abilities and experience of each individual lawyer who worked on this case are more fully discussed in the attached Affidavit of Mr. Armstrong and Declaration of Mr. Schiffmiller. J. The "Undesirability" of the Case

From counsels' perspective, undertaking the defense of Del in this case was not "undesirable," although, as mentioned above, this entire litigation could have been avoided if Lemelson had waited until the conclusion of the Symbol/Cognex lawsuit before deciding whether to file suit here. K. The Nature and Length of the Professional Relationship Between the Attorney and the Client

Kirschstein, Ottinger has represented Del in intellectual property matters since 1969. That firm handles many areas of Del's patent and trademark work, and has represented Del both as a plaintiff and a defendant in a number of past litigations in the federal courts. Sacks Tierney was hired as local counsel for Del in this matter on the recommendation of Kirschstein, Ottinger. Sacks Tierney had no prior relationship with Del. L. Awards in Similar Actions

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Del believes that the amount it seeks herein is commensurate with fees awarded in similar types of circumstances. M. Other Matters Deemed Appropriate under the Circumstances

In addition to the successful stay strategy adopted by Del, a substantial amount of attorney time was saved through Kirschstein, Ottinger's and Sacks Tierney's defense of another company (Liz Claiborne, Inc.) in one of the other four parallel lawsuits filed by Lemelson in the District of Arizona, Lemelson Med., Educ. & Research Found., Ltd. P'ship v. CompUSA, Inc., No. CIV '00-0663 PHX HRH. Because both cases proceeded on nearly simultaneous tracks with the same outcomes, the attorneys' fees charged by Kirschstein, Ottinger and Sacks Tierney could be and were nearly equally divided and shared between Del and Liz Claiborne, greatly reducing the fees billed to each client.

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P.A., LAWYERS 4250 NORTH DRINKWATER BOULEVARD FOURTH FLOOR SCOTTSDALE, ARIZONA 85251-3647

IV.

CONCLUSION For all of the reasons discussed above, Del asks that it be awarded the full amount

of attorneys' fees and related non-taxable costs itemized on Exhibits D and F hereto. Rather than await the outcome of the Symbol/Cognex litigation. Lemelson recklessly and in bad faith chose to file this baseless, far-flung lawsuit against Del and the other 100+ named Defendants hoping to force them into settlements rather than incur the extraordinary expense and risk of litigating the "merits" of Lemelson's patent infringement claims, which (as found by the Symbol/Cognex courts) were built upon its systematic abuses and extensions of the patent registration process. Such conduct clearly renders this case "exceptional" under 35 U.S.C. § 285, justifying the compensation of Del for the legal expenses it was forced to bear in successfully defeating Lemelson's Draconian claims for damages and injunctive relief. RESPECTFULLY SUBMITTED this 3rd day of April, 2006.

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SACKS TIERNEY

SACKS TIERNEY P.A.
By: s/ James W. Armstrong

Attorneys for Defendant Del Laboratories, Inc.

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