Monday, January 11, 2021

The CAFC reviews taxable costs under section 1920 in view of CA3 law

The outcome in Parallel Networks v. Microsoft at the CAFC:

Parallel Networks Licensing, LLC, appeals a United States District Court for the District of Delaware order awarding costs under 28 U.S.C. § 1920 to Microsoft Corporation for depositions, documents, and trial exhibits. J.A. 1–3. For the following reasons, we affirm-in-part, vacate-in-part, and remand.
The issue:

The district court granted costs in the amount of $182,684.68, only denying the trial transcript costs. Parallel Networks appeals, disputing $153,775.10 of the $182,684.68 award. Microsoft seeks affirmance of $141,488.28 of the $182,684.68 award: the full award for deposition transcripts and for trial exhibits, and $31,358.78 of the $72,555.18 award for document production. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
(...) Section 1920 permits the recovery of “[f]ees for printed or electronically recorded transcripts necessarily obtained for use in the case.” The district court’s analysis addressed “deposition transcripts and deposition recordings” but then ordered the taxation of “the deposition costs.” Microsoft argues that because the depositions themselves were necessary, it should be entitled to all of the challenged costs, even costs which can be fairly characterized as convenience, not necessary, costs such as realtime transcription or early transcripts. And it is entirely unclear what the fees delineated as laptop fees and litigation package fees even are much less whether they were necessary for the printed or recorded transcript of any deposition. It is not enough that the depositions themselves were “necessary,” § 1920(2) allows only for “[f]ees for printed or electronically recorded transcripts necessarily obtained for use in the case.” We thus vacate and remand for the district court to consider whether these fees are the type that the Third Circuit would agree constitute fees for printed or electronically recorded transcripts or whether such convenience fees are beyond the scope of taxable costs.
Trial exhibit copies and their associated folders and labels are taxable costs. See § 1920(4); see also, e.g., In re Ricoh Co., Ltd. Patent Litig., 661 F.3d 1361, 1368 n.3 (Fed. Cir. 2011) (it would not be an abuse of discretion to award costs for tabs and folders if “related to categories of documents as to which the recovery of reproduction costs under section 1920(4) is appropriate”). Given that these types of costs are taxable under § 1920(4), we review the district court’s award of these costs for abuse of discretion. Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158, 167–68 (3d Cir. 2012). Contrary to Parallel Networks’ argument, there is no statutory requirement that copies be admitted at trial in order to recover costs for those copies. See § 1920(4); see also In re Ricoh, 661 F.3d at 1367 (applying Ninth Circuit law) (section 1920(4) “does not require . . . that the copies actually be used in the case or made part of the record.”). Because the invoice attached to the Golden Declaration seems to be reasonably consistent with a commercial exhibit printing order, the district court acted within its discretion in taxing these costs in what it deemed to be a complex patent litigation


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