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High Court's View of 'Full Costs' in Copyright Litigation
The copyright statute provision that permits an award of “full costs” to a prevailing party does not include litigation-related expenses such as expert witness fees, jury consulting fees and e-discovery. A unanimous U.S. Supreme Court, led by Justice Brett Kavanaugh, held that the phrase “full costs” in §505 of the Copyright Act means all of the costs specifically enumerated in the general cost-shifting statutes, 28 U.S.C. §§1821 and 1920, such as transcripts and fees for court-appointed experts and interpreters.
“A 'full moon' means the moon, not Mars,” Justice Kavanaugh wrote in Rimini Street Inc. v. Oracle USA Inc., 17-1625 (March 4, 2019). “A 'full breakfast' means breakfast, not lunch. A 'full season ticket plan' means tickets, not hot dogs. So too, the term 'full costs' means costs, not other expenses.”
The decision will cost Oracle approximately $12.8 million that had been awarded in its copyright battle with Rimini Street. See, Oracle v Rimini Street, No. 16-16832 (9th Cir. Jan. 8, 2018).
Kirkland & Ellis partner Paul Clement had argued that the U.S. government as amicus curiae was talking out of both sides of its mouth: placing limits on “full” in Oracle's case, but arguing for an expansive version of the phrase “all the expenses” in a case involving U.S. Patent and Trademark Office attorneys fees.
Clement had also argued that Congress' use of “full” had no meaning if it was limited to the enumerated costs. But interpreting “full” more broadly, Justice Kavanaugh wrote, would then make the next §505 sentence — which says “the court may also award a reasonable attorney's fee to the prevailing party as part of the costs” — superfluous.
“In order to avoid some redundancy, Oracle's interpretation would create other redundancy,” Justice Kavanaugh wrote.
Gibson, Dunn & Crutcher partner Mark Perry had the winning argument for Rimini Street.
The award stems from a 2015 jury verdict that found Rimini infringed Oracle's copyright and violated anti-hacking statutes while performing third-party maintenance for Oracle enterprise software. Jurors awarded $35.6 million for infringement and $14.4 million for violations of California computer hacking statutes. Federal District Judge Larry Hicks of Nevada tacked on $28.5 million in attorney fees, and about $17 million in costs and $22 million in post-judgment interest. The U.S. Court of Appeals for the Ninth Circuit reversed the computer crimes verdict and threw out that portion of the award. It also instructed District Judge Hicks to reconsider the fee award.
But the Ninth Circuit upheld the costs, citing its 2005 opinion in Twentieth Century Fox Film Corp. v. Entertainment Distributing, 429 F.3d 869 (9th Cir. Nov. 18, 2005).
Justice Kavanaugh added about U.S. Supreme Court precedents: “Our cases, in sum, establish a clear rule: A statute awarding 'costs' will not be construed as authorizing an award of litigation expenses beyond the six categories listed in §§1821 and 1920, absent an explicit statutory instruction to that effect.”
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Scott Graham covers intellectual property and the U.S. Court of Appeals for the Federal Circuit for ALM, the parent company of Entertainment Law & Finance. He can be reached at [email protected].
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