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Prevailing Party Required to Provide Adequate Documentation to Recover Costs Under 28 U.S.C. § 1920

11-1199
November 23, 2011

Decision icon Decision

Last Month at the Federal Circuit - December 2011

Judges: Lourie, Bryson, Dyk (author)

[Appealed from: N.D. Cal., Judge Ware]

In In re Ricoh Co. Patent Litigation, No. 11-1199 (Fed. Cir. Nov. 23, 2011), the Federal Circuit affirmed-in-part, reversed-in-part, and vacated-in-part the district court’s award of costs to Synopsys, Inc. (“Synopsys”) under 28 U.S.C. § 1920 and remanded for further proceedings.

Ricoh Company, Ltd. (“Ricoh”) owns U.S. Patent No. 4,922,432 (“the ’432 patent”), which claims a system and process for designing application-specific integrated circuits. In January 2003, Ricoh asserted the ’432 patent against several of Synopsys’s customers and Synopsys responded by filing a DJ action against Ricoh. Ultimately, the district court granted Synopsys’s motion for SJ of noninfringement. In a first appeal, the Federal Circuit affirmed.

After judgment was entered, Synopsys, as the prevailing party, filed a bill of costs. Ricoh contested the bill of costs and, ultimately, the trial court awarded Synopsys nearly $939,000 under 28 U.S.C. § 1920. The award included approximately $235,000 for an electronic document database under 28 U.S.C. § 1920(4); approximately $323,000 for exemplification fees and copy costs under § 1920(4); and approximately $131,000 for deposition and interpreter costs under § 1920(2) and (6), respectively. Ricoh again appealed.

The Federal Circuit first addressed the district court’s award of $235,000 to Synopsys for a third-party electronic document database maintained by Stratify. The Court concluded that the district court did not abuse its discretion in concluding that such costs were taxable as a means of document production because electronic production of documents “can constitute ‘exemplification’ or ‘making copies’ under section 1920(4),’” absent an agreement to the contrary. Slip op. at 6-7. The Federal Circuit determined, however, that because the parties had contractually agreed during the litigation to share the cost of Stratify and never indicated that the cost-sharing was only temporary, the parties’ agreement was controlling. Thus, because the parties had “agreed to the contrary,” the Federal Circuit reversed the district court’s award of approximately $235,000 for Synopsys’s share of the database.

Second, the Federal Circuit found that the district court abused its discretion by awarding approximately $323,000 in document copying costs because Synopsys did not meet its burden under § 1920 to establish the amount of costs to which it was entitled. The Federal Circuit concluded that it was unable, in many instances, to determine from Synopsys’s Revised Bill of Costs what documents were being reproduced and to which side the copies were ultimately provided. The Court noted that a prevailing party seeking to recover copying costs related to its own document production must establish in connection with its Bill of Costs (1) “that the reproduced documents were produced by it pursuant to Rule 26 or other discovery rules”; (2) “that they were copied at the prevailing party’s expense and at the request of the opposing party”; and (3) “that the copies were tendered to the opposing party.” Id. at 12. Accordingly, the Federal Circuit vacated and remanded to the district court to consider additional documentation and/or affidavits from the parties to demonstrate which copies were produced pursuant to the rules of discovery and ultimately provided to Ricoh.

Finally, the Federal Circuit concluded that the trial court’s award of approximately $131,000 for transcriptions of depositions and interpreter fees incurred during those depositions was not an abuse of discretion. The Court concluded that Ninth Circuit law was clear that “a document need not be offered as evidence to have been necessarily obtained for use in the case,” in accordance with § 1920. Id. at 14. Thus, the district court did not err by including the costs for all of the depositions taken after determining that, at the time they were taken, it was reasonable to expect that they were for the purpose of trial preparation. Thus, the Federal Circuit affirmed the award of costs for paper and videotaped depositions as well as the costs for interpreters because translation was necessary in connection with several of the depositions.

Accordingly, the Court affirmed-in-part, reversed-in-part, and vacated-in-part the district court’s award of costs to Synopsys and remanded for further proceedings.

Summary authored by Matthew T. Nesbitt, Esq.