By Jason Rantanen
In re Ricoh Company, Ltd. Patent Litigation (Fed. Cir. 2011) Download 11-1199
Panel: Lourie, Bryson, Dyk (author)
After seven years of litigation between Ricoh Co., the patent holder, and Synopsys, Inc., the latter party prevailed via summary judgment of noninfringement, a decision affirmed by the Federal Circuit earlier this year. After Synopsys's victory on the merits, the district court awarded costs totalling $938,957.72. Ricoh appealed, challenging three categories of costs as not allowed by 28 U.S.C. § 1920, the relevant authorizing statute. In ruling on Ricoh's challenges, the Federal Circuit applied the law of the regional circuit (in this case that of the Ninth).
Costs for Document Production Database: A significant expense of patent litigation is that of document discovery and this case was no exception. During discovery Ricoh sought production of emails and other documents. Initially the parties were unable to agree on the form of production, but ultimately agreed that Synopsys would produce documents using Stratify, an e-discovery company that provides document processing, review, production and hosting services. The district court awarded the full cost of using Stratify as "fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case" under § 1920(4).
On appeal the CAFC agreed with the court's characterization of the costs. "The act of producing documents is not so narrowly construed as to cover only printing and Bates-labeling a document." Slip Op. at 6. "Thus, the costs of producing a document electronically can be recoverable under section 1920(4)." Id. at 7. In this case, however, Ricoh and Synopsys had agreed during the litigation to share the costs of using Stratify. The CAFC held that the agreement was controlling, leading it to reverse the district court's award for Synopsys's share of the database.
Note: Although not explicitly addressed by the panel, the parties' briefs suggest that Synopsys used Stratify as a mechanism for both review and production. The CAFC's opinion is unclear on whether this should make any difference – it both implies that this dual use does not matter ("We do not consider any of the Stratify database costs to fall into the unrecoverable category of 'intellectual efforts,'" Slip Op. at 7), while at the same time leaving open the future possibility of disallowing certain costs tangential to the production itself. ("In light of our decision, we need not decide if the additional challenged items related to the database were improperly allowed.")
Copying Costs Must Be Specific: The CAFC also declined to affirm the district court's award of copying costs, citing a lack of specificity in the supporting documentation:
When the prevailing party seeks to recover copying costs related to its own document production, to meet the documentation requirements, the prevailing party must establish, in connection with its proposed Bill of Costs, that the reproduced documents were produced by it pursuant to Rule 26 or other discovery rules; that they were copied at the prevailing party’s expense and at the request of the opposing party; and that the copies were tendered to the opposing party.
Depositions and Translation Costs Allowable: Ricoh also challenged the award of costs associated with depositions that were related to issues other than noninfringement. The CAFC concluded that allowing costs for these depositions was within the discretion of the district court as it was reasonable to expect they would be used in trial. It further held that the district court appropriately taxed costs for both videotaping and preparation of written transcripts, rejecting Ricoh's argument that it was limited to one or the other.