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Copyright Act; recovery of litigation costs; statutory meaning of “costs”

by | Apr 15, 2019 | Intellectual Property

Rimini Street, Inc. v. Oracle USA, Inc., ___ U.S. ___, No. 17-1625 (4 March 2019)

Oracle USA, Inc. (Oracle) develops and licenses software programs that manage data and business operations, and Oracle offers software maintenance services.  Rimini Street, Inc. (Rimini) sells software maintenance services to Oracle’s customers and competes with Oracle’s software maintenance services.  Oracle sued Rimini and its CEO for copyright infringement, asserting that Rimini copied Oracle’s software without licensing it.

A jury found that Rimini had infringed Oracle’s copyrights and awarded Oracle damages, attorney’s fees and costs.  The District Court also ordered the defendants to pay Oracle an additional $12.8 million for “litigation expenses such as expert witness fees, e-discovery, and jury consulting.”  The Court of Appeals affirmed, including the additional award of $12.8 million for litigation expenses.  That $12.8 million award for litigation expenses was the subject of the Supreme Court’s opinion.

The Copyright Act gives federal district courts discretion to award “full costs” to a party in copyright litigation. 17 U.S.C. §505.  In the general statute governing awards of costs, Congress has specified the categories of litigation expenses that qualify as “costs,” and that a litigant can claim as costs:

  1. Costs for paying witnesses per diem, travel and subsistence;
  2. Fees of the clerk and marshal;
  3. Fees for printed or electronically recorded transcripts necessarily obtained for use in the case;
  4. Fees and disbursements for printing;
  5. Fees for authentication of documents and the costs of making copies of materials necessarily obtained for use in the case; and
  6. Docket fees.

See, 28 U.S.C. §§1821, 1920.  The question before the Supreme Court was whether the Copyright Act’s reference to “full costs” authorizes a court to award litigation expenses beyond the categories of costs specified by Congress in the general costs statute.

The Court said that §§1821 and 1920 define what the term “costs” encompasses in subject-specific federal statutes that provide for an award of costs, such as §505 of the Copyright Act.  The general costs statute creates a default rule and establishes a clear baseline against which Congress may legislate.  Absent other specific legislation, federal courts are limited to awarding the costs specified in 28 U.S.C. §§1821 and 1920.  Congress may authorize the award of expenses beyond those categories specified in the general costs statute.  Indeed, the Copyright Act expressly provides for the award of attorneys’ fees as well as costs. 17 U.S.C. §505.  But absent such express authority, courts may not award litigation expenses that are not specified in §§1821 and 1920.

The Court said that its precedents have consistently adhered to that approach. See, e.g., Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441 (1987)(“costs” do not include expert witness fees); West Virginia Univ. Hospitals, Inc. v. Casey, 499 U.S. 83 (1999)(42 U.S.C. §1988 does not authorize award of expert witness fees); Arlington Central School Dist. Bd. of Ed. v. Murphy, 548 U.S. 291, 297 (2006)(“costs” is a term of art that generally does not include expert fees).

The Court rejected Oracle’s argument that the Copyright Act’s use of the word “full” before “costs” expands the meaning of costs to include litigation expenses such as experts’ fees, e-discovery costs, and jury consulting.  “Full” is a term of quantity or amount.  It is an adjective meaning the complete measure of the noun it modifies. Weyerhaeuser Co. v. United States Fish and Wildlife Serv., 586 U.S. ___, ___ (2018)(slip op. at 8).  The adjective “full” in §505 of the Copyright Act does not alter the meaning of the word “costs.”  Rather, “full costs” are all the “costs” otherwise available under the law.  The word “full” operates in the phrase “full costs” just as it operates in other common phrases: for example, a “full moon” means the moon not Mars.

The Court held that the term “full costs” in §505 of the Copyright Act means the costs specified in the general costs statute codified at 28 U.S.C. §§1821 and 1920.

Justice Kavanaugh wrote the opinion for a unanimous Court.

John Polk is a Special Counsel at Berenzweig Leonard, LLP. John can be reached at [email protected].