*1 Plaintiff QueTel Corporation has filed its Amended Motion for Attorneys' Fees and Costs [Doc. No. 171] (the “Motion”), which seeks to recover attorney's fees under the Copyright Act, 17 U.S.C. § 505, Rule 37 of the Federal Rules of Civil Procedure, and this Court's inherent power. Upon consideration of the Motion, the memoranda submitted in support thereof and in opposition thereto, and for the reasons that follow, the Court awards $102,910.20 ($65,516.45 in attorney's fees and $37,393.75 in costs and expenses), and the Motion is otherwise DENIED.

On April 19, 2017, Plaintiff QueTel Corporation (“Plaintiff” or “QueTel”) initiated this action for copyright infringement and trade secrets misappropriation against Defendant finalcover, LLC (“finalcover”) and its two owners, Defendants Hisham Abbass (“Abbas”) and Shorouk Mansour (“Mansour”). On January 19, 2018, the Court entered as a discovery sanction judgment against all Defendants as to liability on Counts I for copyright infringement of Plaintiff's registered copyright in “TraQ Suite 6” software and on Count II for misappropriation of trade secrets pertaining to that software based on Defendants' bad faith destruction of evidence. See [Doc. No. 109]. On January 22, 2018, the Court held a bench trial concerning damages.

On October 25, 2018, the Court ruled that Plaintiff had failed to establish that it had suffered any actual damages as a result of Defendants' misappropriation or infringement of TraQ Suite 6 and that Plaintiff's intangible rights and injuries could be adequately addressed through injunctive relief. See [Doc. No. 141]. Accordingly, the Court entered judgment under Rule 58 in Plaintiff's favor on Counts I and II of the Complaint and awarded Plaintiff a permanent injunction against Defendants as to their continued use, marketing, or sale of the CaseGuard software (but not as to the CaseGuard Studio product) and statutory damages under the Copyright Act of $5,000. Id. at 14. The Court also ruled against Plaintiff with respect to its request for costs and attorney's fees under the Virginia Uniform Trade Secrets Act, Va. Code § 59.1-338.1, having determined that there was no willful and malicious misappropriation on the part of Defendants; and with respect to Plaintiff's request for attorney's fees and costs under the Copyright Act, the Court directed Plaintiff to break out separately in any application for attorney's fees and costs “those expenses and costs sought with respect to (1) obtaining the Court's Order dated January 19, 2018 [imposing the discovery sanction]; (2) trial and the preparation for trial as to Counts I and II; and (3) all other tasks.” Id. at 13-14.

On November 4, 2018, Defendants appealed the Court's October 25 Order, [Doc. No. 143], and a motion to stay the injunctive relief pending appeal or, alternatively, for approval of a supersedeas bond to stay alternative relief, [Doc. No. 144]. On November 8, 2018, Plaintiff filed its motion for attorney's fees, as the Court directed. [Doc. No. 149]. On November 21, 2018, the Court entered an Order denying the motion to stay and setting a supersedeas bond at $150,000 and holding in abeyance the motion for attorney's fees pending further Order of the Court following the Fourth Circuit's decision on appeal. [Doc. No. 158].

*2 On July 16, 2020, the Fourth Circuit issued its opinion affirming the decision of this Court, [Doc. No. 165], and on August 7, 2020, the mandate issued, [Doc. No. 167]. On August 10, 2020, the Court ordered Defendants to respond to the motion for attorney's fees. [Doc. No. 168]. On August 17, 2020, Plaintiff, with Defendants' consent, moved to amend the motion for attorney's fees, [Doc. No. 169], which the Court granted, [Doc. No. 170]. On August 31, 2020, Plaintiff filed the pending Amended Motion for Attorneys' Fees and Costs, [Doc. No. 171], and accompanying memorandum, [Doc. No. 172]. Defendants oppose the Motion. [Doc. No. 173]. Plaintiff has filed a reply. [Doc. No. 174].

Plaintiff Quetel now seeks a total award of $410,067.87,[1] comprised of (a) attorney's fees in the amount of $291,517.29 pursuant to 17 U.S.C. § 505, and (b) attorney's fees of $94,925.52 and costs and expenses of $89,142.50 pursuant to Fed. R. Civ. P. 37 and this Court's inherent power under the common law. See [Doc. No. 174]. Specifically, Plaintiff seeks an award as follows:

Section 505 of the Copyright Act, 17 U.S.C. § 505, provides:

In Kirtsaeng v. John Wiley & Sons, Inc., the Supreme Court observed that fees under Section 505 of the Copyright Act should not be awarded “as a matter of course” but rather a district court must “make a more particularized, case-by-case assessment” in determining whether to exercise its equitable discretion and impose fees. 579 U.S. 197, 202 (2016) (citation omitted). In determining whether to award fees in a particular case, the Fourth Circuit has identified four factors that should be considered, including “(1) the motivation of the parties; (2) the objective reasonableness of the legal and factual positions advanced; (3) the need in particular circumstances to advance considerations of compensation and deterrence; and (4) any other relevant factor presented.” Superior Form Builders, Inc. v. Dan Chase Taxidermy Supply Co., 74 F.3d 488, 498 (4th Cir. 1996); see also Rosciszewski v. Arete Assocs., Inc., 1 F.3d 225, 234 (4th Cir. 1993). Once it is determined that attorney's fees should be awarded in a particular case, it is also within the sound discretion of the Court to fix the amount. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). The party requesting attorney's fees bears the burden of establishing that the amount requested is reasonable. Cook v. Andrews, 7 F. Supp. 2d 733, 736 (E.D. Va. 1998).

*3 The Fourth Circuit has endorsed a three-step procedure in determining the proper amount of attorney's fees. First, the court must “determine a lodestar figure by multiplying the number of reasonable hours expended times a reasonable rate.” Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009). To ascertain what is reasonable in terms of hours expended and the rate charged, the court is bound to apply the factors set forth in Johnson v. Georgia Highway Express Inc., 488 F.2d 714, 717-19 (5th Cir. 1974). Id. at 243-44. Those Johnson factors include:

488 F.2d at 717-19.

The Court must also consider whether an individual's rate is reasonable given the “prevailing market rates in the relevant community,” which is understood to be the community within the jurisdiction where the action is tried. Rum Creek Coal Sales, Inc. v. Caperton, 31 F.3d 169, 175 (4th Cir. 1994) (internal citation and quotations omitted). In that regard, the Fourth Circuit has required that “[i]n addition to the attorney's own affidavits, the fee applicant must produce satisfactory specific evidence of the prevailing market rates in the relevant community for the type of work for which he seeks an award.” Plyler v. Evatt, 902 F.2d 273, 277 (4th Cir. 1990) (internal citations and quotations omitted). Second, the Court must then “subtract fees for hours spent on unsuccessful claims unrelated to successful ones.” Robinson, 560 F.3d 244 (internal citation and quotations omitted). Third, the Court should award “some percentage of the remaining amount, depending on the degree of success enjoyed by the plaintiff.” Id. (internal citation and quotations omitted). While these factors must guide the analysis, there is no strict formula the Court is required to follow. See Trimper v. City of Norfolk Va., 846 F. Supp. 1295, 1303 (E.D. Va. 1994), aff'd 58 F.3d 68 (4th Cir. 1995); In re Microstrategy, Inc., 172 F. Supp. 2d 778, 787 (E.D. Va. 2001) (recognizing that “arithmetic calculations aid the fee-setting process, but ultimately a trial court's judgment is centrally important and may trump the calculations”). Moreover, as repeatedly noted by the Fourth Circuit, “the most critical factor in determining the reasonableness of a fee award is the degree of success obtained.” Doe v. Chao, 435 F.3d 492, 506 (4th Cir. 2006) (internal citation and quotations omitted).

In assessing whether to award attorney's fees under the relevant criteria, the Court has reviewed the applicable considerations in light of the facts of the case, as set forth in the Court's Orders dated January 19, 2018 [Doc. No. 109], and October 25, 2018 [Doc. No. 141].

*4 In the Court's October 25, 2018 Order, the Court found that Plaintiff had demonstrated that Defendants were liable for copyright infringement and misappropriation of trade secrets with respect to the TraQ Suite 6 source code through the use, marketing, and sale of its CaseGuard software, but that Plaintiff had not established that it had suffered any actual damages as a result of Defendants' actions. See [Doc. No. 141]. The Court also determined that Plaintiff's injuries could be adequately addressed through injunctive relief, and, as such, awarded Plaintiff a permanent injunction against Defendants. Id. Plaintiff sought a judgment against Defendants in the amount of $1,516,303.29, but the Court only awarded Plaintiff statutory damages under the Copyright Act in the total amount of $5,000. In addition, the Court also found that on these facts, Plaintiff was not entitled to recover from Defendants costs and attorney's fees under the Virginia Uniform Trade Secrets Act, Va. Code § 59.1-338.1.

Plaintiff's motivation here was clear – to address what appeared to be a misappropriation of its intellectual property by its lead software developer, and according to Plaintiff, it was able to achieve “its primary goal” of obtaining injunctive relief, see [Doc. No. 174] at 5 n.4; [Doc. No. 141]. But, as reflected above, and discussed below, the breadth of the litigation far exceeded that primary goal. Plaintiff sought to recover $1,516,303.29 in damages under the Copyright Act, as well as costs and attorney's fees for a willful and malicious misappropriation under the Virginia Trade Secrets Act, neither of which was successful; and Plaintiff's overall success was limited to the injunction and an award of statutory damages under the Copyright Act of $5,000. See [Doc. No. 141]. Moreover, by virtue of the discovery sanction imposed on Defendants, Plaintiffs were relieved, as of January 19, 2018, of the substantial burden of establishing liability. See [Doc. No. 109], at 6. Nevertheless, Plaintiff now seeks all of its costs and attorney's fees incurred for the entire case, totaling $410,067.87. In light of the record, it appears Plaintiff's position as to non-monetary relief was reasonable; however, Plaintiff's request for monetary relief was not. Accordingly, given the overall outcome and the limited relief obtained, the Court finds that this factor weighs heavily in favor of reducing the amount of attorney's fees. See, e.g., Quantum Sys. Integrators, Inc. v. Sprint Nextel Corp., 2009 WL 3423848, at *6 (E.D. Va. Oct. 16, 2009) (“[W]hile Quantum technically qualifies as a prevailing party, the success it actually achieved in this lawsuit was minimal. Therefore, this critical factor militates heavily in favor of reducing the amount in attorney's fees awarded to Quantum.”).

The Court found in its Order dated January 19, 2018 that Defendants' spoliation of evidence relevant to this lawsuit warranted the entry of judgment against them as to two counts in this suit as a discovery sanction. See [Doc. No. 109], at 5-6. The Court further found that this was the least drastic sanction that could adequately serve as a deterrent to the Defendants' discovery misconduct. Id. For these reasons and those stated above, considerations of compensation and deterrence weigh in favor of an attorney's fee award, but only with regard to those fees incurred in obtaining the January 19, 2018 Order.

For fees incurred in obtaining the January 19, 2018 Order, Plaintiff seeks $65,516.45. Plaintiff seeks this amount based on hourly rates that range from $450 per hour for the time of a lawyer with twenty-seven years of experience to $125 per hour for the time of a paralegal with ten years of experience. See [Doc. No. 149-3] (Decl. of Robert E. Scully, Jr.) at 6. The Court finds these rates reasonable in light of—and indeed even lower than—the prevailing market rate as reflected in the Vienna Metro matrix from 2011 and the Declaration of Robert Scully submitted in support of Plaintiff's fee application. Id. The Court has also reviewed in detail the time records and invoices that have been submitted and have determined that a total of 247.6 hours were expended in obtaining the January 19, 2018 Order at an average rate of approximately $264.61, which results in the lodestar amount of approximately $65,517.44, which is slightly higher than Plaintiff's requested amount.

*5 The Court has next considered what percentage of that lodestar amount should be awarded based on the Plaintiff's success in obtaining judgment in its favor, and awards the full lodestar amount or, in this case, Plaintiff's requested amount of $65,516.45.

With respect to expenses, Plaintiff seeks to recover $89,142.50, nearly all of which pertain to Plaintiff's use of its expert Myers. [Doc. No. 174], at 13. Specifically, Plaintiff seeks to recover $74,787.50 in expenses incurred related to Myers' work in assisting Plaintiff obtain the Court's January 19, 2018 Order ($62,000) and the excess costs involved in performing a comparative analysis of TraQ Suite 6 and CaseGuard ($12,787.50). [Id.] Pursuant to Rule 37(b)(2)(C), the court “must order the disobedient party, ... to pay the reasonable expenses, including attorney's fees.” Fed. R. Civ. P. 37(b)(2)(C). “A court may only decline to award expenses if ‘the failure was substantially justified or other circumstances make an award of expenses unjust.’ ” Diversified Lending, LLC v. Hotz, 2019 WL 149557, at *2 (E.D. Va. Jan. 9, 2019) (quoting Fed. R. Civ. P. 37(b)(2)(C)). Defendants contend that an award of Myers' expenses is not warranted based on several grounds, including that he “lacked basic credibility.” [Doc. No. 173], at 15-16. The Court finds no merit to those grounds, but nevertheless concludes that an award of expenses more in line with its fee award is appropriate and given the substantially reduced fee award relative to what has been requested, awards $37,393.75 in expert expenses, which is equivalent to 50% of the requested $74,787.50 in expenses incurred in relation to the January 19, 2018 Order.

Accordingly, it is hereby

ORDERED that Plaintiff QueTel Corporation's Amended Motion for Attorneys' Fees and Costs [Doc. No. 171] be, and the same hereby is, GRANTED in part and DENIED in part; it is GRANTED to the extent that Plaintiff QueTel Corporation is hereby awarded $102,910.20 ($65,516.45 in attorney's fees and $37,393.75 in costs and expenses), judgment for which be, and the same hereby is, ENTERED in favor of Plaintiff QueTel Corporation and against Defendants finalcover, LLC, Hisham Abbass, and Shorouk Mansour; and it is otherwise DENIED.

The Clerk is directed to enter judgment in accordance with this Order, forward copies of this Order to all counsel of record, and close this case.

Alexandria, Virginia