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Dssdr, LLC v. Zenith Infotech, Ltd.

United States District Court, D. Massachusetts

June 20, 2014

DSSDR, LLC, Plaintiff,
v.
ZENITH INFOTECH, LTD., Defendant.

MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION FOR ATTORNEYS' FEES

F. DENNIS SAYLOR, IV, District Judge.

This is a contract dispute. Plaintiff DSSDR, LLC and defendant Zenith Infotech, Ltd. entered into a licensing agreement in 2009 that granted defendant the use of certain technology developed by plaintiff. Plaintiff sued defendant for, among other things, breach of contract.

On December 9, 2013, the Court granted summary judgment in plaintiff's favor as to liability on the claim for breach of contract but denied it without prejudice as to damages. On March 19, 2014, plaintiff filed a motion for summary judgment as to its damages. On April 8, 2014, the Court granted the motion as to a portion of the damages and denied it as to the remainder.

On May 1, 2014, plaintiff filed a motion claiming $244, 940.63 in attorneys' fees. For the following reasons, that motion will be granted in part and denied in part.

I. Background

A. Factual Background

The facts summarized below are undisputed.

On August 15, 2009, DSSDR, LLC and Zenith Infotech, Ltd. entered into a written licensing agreement entitled the "2009 Appliance and Remote License Agreement." (License Agreement, Docket No. 131, Ex. 2 at *1). In the License Agreement, DSSDR licensed to Zenith the rights to use, market, and copy certain technology it had developed. (License Agreement ¶ 2.1). That technology included know-how for a client-side backup application that allowed nearly instant server system recovery, and know-how for certain remote data storage and data center operations systems. (License Agreement, Ex. A at *9-10).

In return, Zenith agreed to pay DSSDR 7% or 7.5% of the revenues from its use, sale, or lease of DSSDR's technology, depending on whether the technology was used as part of a "Licensed Appliance Product" or an "Off-Site Storage service" as defined by the agreement. (Licensing Agreement ¶¶ 8.1, 8.3, Ex. A at *11). The parties also agreed that:

All past-due payments will incur a late fee of twenty percent (20%) as well as accrue interest at a rate of 1.5% per month or the highest rate permissible by law, whichever is less, on the unpaid balance from the due date until paid in full. Licensee shall reimburse Licensor for all reasonable costs incurred (including reasonable attorney's fees) in collecting past-due amounts.

(License Agreement ¶ 8.3). Finally, the parties agreed that if Zenith merged with another company or sold substantially all of its assets, it would pay DSSDR 7.5% of the proceeds from the sale of the product lines associated with DSSDR's licensed technology. ( Id. ¶ 13.1(a)).

Since August 2012, Zenith has used the technology DSSDR licensed to it under the agreement, but has not paid any fees. (Bensinger Aff., Docket No. 131, Ex. 5 ¶ 9).

B. Procedural Background

This action was filed on August 6, 2012, in state court in California. The original complaint alleged claims against Zenith, Zenith's CEO, Continuum Managed Services, LLC, Continuum's CEO, and Summit Partners, L.P. On August 16, 2012, the case was removed to the United States District Court for the Northern District of California.

On October 4, 2012, defendants filed a motions to dismiss and motions to transfer venue. On January 3, 2013, the motions to transfer were granted, and the case was transferred to this Court. The transfer order stated that "[p]laintiffs have not met their burden to demonstrate that venue in this district is proper.... [B]ecause all defendants agree, and [p]laintiffs do not dispute, that this action may have been brought in... Massachusetts, the Court exercises its discretion to ...


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