Farstone Technology, Inc. v. Apple Inc., No. 8:2013cv01537 - Document 217 (C.D. Cal. 2016)
Court Description: ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS MOTION TO RETAX COSTS 210 by Judge Otis D. Wright, II: The Court GRANTS Plaintiffs motion as to costs associated with the exhibit copying discussed above and DENIES Plaintiffs motion as to the remaining objections to the Clerks Bill of Costs. Accordingly, the Court orders Plaintiff to pay $40,803 less the reductions discussed above ($861.30) for a total of $39,941.70. (lc). Modified on 9/30/2016 .(lc).
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Farstone Technology, Inc. v. Apple Inc. Doc. 217 O 1 2 3 4 5 6 United States District Court Central District of California 7 8 9 10 FARSTONE TECHNOLOGY, INC., Case 8:13-cv-1537-ODW(JEMx) Plaintiff, 11 12 v. ORDER GRANTING IN PART AND 13 APPLE INC., DENYING IN PART PLAINTIFF’S 14 Defendant. MOTION TO RETAX COSTS 15 16 I. 17 INTRODUCTION 18 This motion to retax costs follows a final judgment in favor of Defendant, 19 Apple Inc. in a patent infringement action brought by Plaintiff, Farstone Technology 20 Inc. Plaintiff asks the Court to find that it is not liable for costs, or in the alternative, 21 to reduce the Clerk’s $40,803 Bill of Costs. For the following reasons, the Court 22 GRANTS Plaintiff’s motion in part and DENIES Plaintiff’s motion in part. 23 II. FACTUAL BACKGROUND 24 Plaintiff initiated the instant action with the filing of a complaint on September 25 30, 2013. (Compl., ECF No. 1.) In the complaint, Plaintiff alleged that Defendant’s 26 Time Machine feature, which allows for data backup and recovery, infringes on its 27 patent (U.S. Patent No. 7,120,835) entitled “Computer Equipment Having a Prompt 28 Access Function.” (Id. ¶ 10.) Defendant filed an answer on March 14, 2014, denying Dockets.Justia.com 1 the allegations and adding two counterclaims. (Answer ¶ 13-21, ECF No. 10.) On 2 December 10, 2014, the Court held a claim construction hearing on several disputed 3 terms of the patent. In a claim construction order issued on February 27, 2015, the 4 Court found that none of the terms were indefinite. (ECF No. 69.) 5 However, after the U.S. Court of Appeals for the Federal Circuit issued 6 Williamson v. Citrix Online LLC, 792 F.3d 1339 (Fed. Cir. 2015), which abrogated 7 certain prior holdings regarding the presumption against applying 35 U.S.C. § 112, ¶ 6 8 to claim language that does not use the word “means,” and Defendant filed a motion 9 for summary judgment, the Court issued a supplemental claim construction order on 10 October 8, 2015. (ECF No. 192.) This order invalidated claims 1-14 of Plaintiff’s 11 patent, U.S. Patent No. 7,120,835, for indefiniteness. 12 incorporated this order into its final judgment issued on November 10, 2015. (ECF 13 No. 196.) This final judgment was subsequently affirmed by the U.S. Court of 14 Appeals for the Federal Circuit on August 16, 2016. (ECF No. 211.) (Id. at 11.) The Court 15 On November 24, 2015, Defendant, as the prevailing party, filed an Application 16 with the Clerk to Tax Costs seeking $46,886. (Appl., ECF No. 200.) Plaintiff 17 objected and Defendant responded. 18 generation of a final Bill of Costs, Defendant withdrew $51.83 in Fees for Service of 19 Process, $237 in Deposition Expenses, and $911.80 for Certification, Exemplification, 20 and Reproduction of Documents. (ECF No. 206.) The parties also agreed to reduce 21 witness fees to $1,111.20. 22 expenses and others, the Clerk’s Bill of Costs totaled $40,803. (ECF No. 206.) 23 Plaintiff asserts in its motion that it should not be held liable for costs given the 24 change of law that occurred during proceedings. (Mot. 1.) In the alternative, Plaintiff 25 asks the Court to reduce Defendant’s claimed expenses for interpretation, 26 photocopying, and electronic discovery. (Mot. 4-10.) Defendant filed opposition to 27 the pending motion, taking issue with Plaintiff’s characterization of the case and 28 disputing individually each of Plaintiff’s proposed cost reductions. (Opp’n 2-11, ECF (ECF Nos. 204-205). (Mot. Ex. A, ECF No. 207.) 2 Prior to the Clerk’s After removing these 1 No. 212.) Plaintiff subsequently filed a reply on August 29, 2016. (Reply, ECF No. 2 214.) III. 3 4 LEGAL STANDARD The district court reviews the Clerk’s Bill of Costs de novo. Jardin v. 5 DATAllegro, Inc., No. 08-CV-1462-IEG WVG, 2011 WL 4835742, at *1 (S.D. Cal. 6 Oct. 12, 2011). However, Local Rule 54-8 explains that this review is limited to the 7 record before the Clerk. 8 As a general matter, Federal Rule of Civil Procedure 54(d) creates a strong 9 presumption in favor of awarding costs to the prevailing party. Miles v. State of 10 California, 320 F.3d 986, 988 (9th Cir. 2003). This presumption is so strong that a 11 court “need not give affirmative reasons for awarding costs” to the prevailing party in 12 rendering its decision on a motion to retax. Save Our Valley v. Sound Transit, 335 13 F.3d 932, 945 (9th Cir. 2003). 14 To overcome this strong presumption in favor of awarding costs to the 15 prevailing party, the losing party must convince the court that the case on which the 16 Bill of Tax rests is “not ordinary,” or in other words, that it would not be equitable for 17 the losing party to bear the costs. Id. (quoting Ass'n of Mexican-Am. Educators v. 18 State of California, 231 F.3d 572, 592-593 (9th Cir. 2000). In evaluating whether a 19 case is “not ordinary” a court weighs seven factors: (1) the losing party's financial 20 resources; (2) whether there was misconduct by the prevailing party; (3) the possible 21 chilling effect of imposing high costs on future civil rights litigants; (4) whether the 22 issues in the case were close and difficult; (5) whether the prevailing party's recovery 23 was nominal or partial; (6) whether the losing party litigated in good faith; and (7) 24 whether the case presented a landmark issue of national importance. 25 Produce, Inc. v. Ruby Robinson Co., 342 F.3d 1016, 1022 (9th Cir. 2003). Champion 26 If the Court determines that the prevailing party is entitled to costs, it must then 27 determine which costs are taxable. A cost is taxable if it falls within one of the 28 categories of costs listed in 28 U.S.C. § 1920 including: (1) fees of the clerk and 3 1 marshal; (2) fees for printed or electronically recorded transcripts necessarily obtained 2 for use in the case; (3) fees and disbursements for printing and witnesses; (4) fees for 3 exemplification and the costs of making copies of any materials where the copies are 4 necessarily obtained for use in the case; (5) docket fees; and (6) compensation of court 5 appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs 6 of special interpretation services.1 While the Court may only award costs that fall 7 within the proscribed categories, it is “free to interpret” the meaning of each category. 8 Taniguchi v. Kan Pac. Saipan, Ltd., 633 F.3d 1218, 1221 (9th Cir. 2011), vacated and 9 remanded on other grounds, 132 S. Ct. 1997, 182 L. Ed. 2d 903 (2012). IV. 10 11 A. DISCUSSION Whether Costs Should Be Denied Entirely to Defendant 12 Plaintiff’s sole argument for denying costs to Defendant, the prevailing party, is 13 that the issues in this case were “close and difficult.” (Reply 2.) To support its 14 argument, Plaintiff points to how the issuance of Williamson during these proceedings 15 effectively changed the outcome of the case. (Mot. 4.) 16 To begin, even if the Court agreed with Plaintiff’s characterization of this case 17 as “close and difficult,” doing so would not allow Plaintiff to overcome the strong 18 presumption in favor of awarding costs to the prevailing party. Both the Ninth Circuit 19 and other district courts have made clear that the mere fact a case is “close and 20 difficult,” does not, by itself, overcome the presumption of awarding costs to the 21 prevailing party. See Steffens v. Regus Grp., PLC, No. 08CV1494-LAB WVG, 2012 22 WL 628235, at *3 (S.D. Cal. Feb. 24, 2012) (citing Nat'l Info. Servs., Inc. v. TRW, 23 Inc., 51 F.3d 1470, 1472 (9th Cir. 1995)). 24 However, the Court takes issue with Plaintiff’s characterization of this case as 25 “close and difficult.” Although there is no uniform standard as to what makes a case 26 “close and difficult,” courts have employed a variety of approaches in making this 27 determination. For instance, one court found a case “close and difficult” after taking 28 1 These categories are expounded upon by Local Rule 54-3. 4 1 into account the length of the decision (ninty-six pages) and the large number of 2 parties involved in the case (twenty-three plaintiffs). Rivera v. NIBCO, 701 F. Supp. 3 2d 1135, 1144 (E.D. Cal. 2010). Another court suggested that a case might properly 4 be deemed “close and difficult” if it involved a “long and complicated trial” or turned 5 on a “determination of credibility at trial.” Jardin, 2011 WL 4835742, at *3. By 6 contrast, this case involved a single plaintiff against a single defendant and was 7 resolved before trial in a straightforward ten and a half-page supplemental claim 8 construction order (of which only five pages consisted of substantive analysis), 9 definitively finding all fourteen claims of Plaintiff’s patent invalid. (ECF No. 192.) 10 Plaintiff’s argument that a change in law during proceedings makes a case 11 “close and difficult” is unavailing. (Reply 2.) Plaintiff has not cited any precedent in 12 support of this proposition. 13 independently locate any such support. (Id.) Likewise, the Court has been unable to 14 Finally, the Court notes that the other Champion Produce factors do not favor 15 Plaintiff. 342 F.3d at 1022. Plaintiff is a corporation and does not assert that paying 16 costs would render it insolvent. Cf. Rivera, 701 F. Supp. 2d at 1145 (finding that the 17 prevailing party was not entitled to costs in part because it would leave the losing 18 party effectively indigent). 19 receive any financial compensation as part of the final judgment. Additionally, the 20 issues in this case did not involve civil rights and were not of national importance.2 21 Based on the foregoing, the Court finds that Plaintiff has not overcome the strong 22 presumption in favor of awarding costs to the prevailing party. 23 B. Further, Defendant did not engage in misconduct or Whether the Court Should Reduce the Clerk’s Bill of Costs 1. Deposition Expenses 24 25 26 27 28 2 The Court was not the first to invoke Williamson. By the time the Court issued its Supplemental Claim Construction Order on October 8, 2015, Williamson had been cited in thirty district court opinions and had been applied in a published Federal Circuit decision to uphold a district court’s decision invalidating claims of a patent for indefiniteness. Media Rights Techs., Inc. v. Capital One Fin. Corp., 800 F.3d 1366, 1375 (Fed. Cir. 2015). 5 1 a. Interpreter 2 Plaintiff disputes $5330 taxed for interpretation services rendered at the 3 depositions of Thomas Lin and Mary Chuang.3 (Mot. 5.) Generally, “compensation 4 of interpreters” constitutes a taxable expense. See 8 U.S.C. § 1920(6); see also L.R. 5 54-3.5 (allowing for the recovery of “reasonable” deposition-related interpreter fees). 6 The Court finds that the interpreters’ hourly fees for provision of services at the 7 depositions are taxable. (See Appl. Ex. B at 6, 8, 10.) The Court also finds the Teresa 8 Wong CLC interpreter’s travel costs taxable. (See id. at 10.) Other district courts 9 have taxed costs associated with interpreter travel. See, e.g., Hynix Semiconductor 10 Inc. v. Rambus Inc., 697 F. Supp. 2d 1139, 1155 (N.D. Cal. 2010); Flores-Torres v. 11 Holder, No. C08-01037 WHA, 2010 WL 1910011, at *3 (N.D. Cal. May 11, 2010). 12 Additionally, travel costs associated with other litigation personnel such as court 13 reporters have been taxed. Oyarzo v. Tuolumne Fire Dist., No. 1:11-CV-01271-SAB, 14 2014 WL 1757217, at *8 (E.D. Cal. Apr. 30, 2014). Finally, the Court notes that the 15 interpreter travel costs requested in this case are minimal; the costs equal one hour at 16 the interpreter’s hourly rate. (See Appl. Ex. B at 10.) 17 The Court next turns to the interpreter’s overtime expenses. While there are no 18 cases specifically establishing whether overtime for interpreters may be taxed, the 19 Court is guided by the principle of reasonableness. Here, the Bill of Costs includes 20 two hours of overtime for a total cost of $450. (Id. at 6, 8.) The hourly fee for these 21 two hours ($225) is only slightly more than the interpreter’s normal hourly rate. (Id.) 22 Moreover, the overtime expenses make up less than ten percent of the overall cost of 23 the interpretation services expended during the pendency of this case. Therefore, the 24 Court taxes the overtime costs. 25 b. Deposition Exhibits 26 Plaintiff argues that the costs associated with the transcription of exhibits 27 should not be taxed because the documentation attached to Defendant’s application 28 3 Neither party disputes that an interpreter was necessary for the three depositions. 6 1 does not establish that the exhibits comply with Local Rule 54-3.5. (Mot. 5.) This 2 local rule permits only the recovery of expenses for “copying or reproducing exhibits 3 used at the deposition and made part of the deposition transcript.” L.R. 54-3.5. 4 The receipts from TSG Reporting (“TSG”) indicate only that it made copies of 5 the deposition exhibits and not whether the exhibits were “used” or “made part of the 6 deposition transcript.” (See Appl. Ex. B at 5, 7, 9, 11, 12, 13.) While Defendant’s 7 attorney submitted a declaration indicating that the ninety-four pages in the TSG bill 8 relating to Mary Chuang’s deposition were actually marked at the corresponding 9 deposition, she has not submitted a similar declaration relating to the other depositions 10 for which Defendant seeks reimbursement. (Landis Decl. ¶2, ECF No. 212.) 11 Therefore, the Court finds it appropriate to tax exhibit copying costs related to Mary 12 Chuang’s deposition but not the remaining deposition exhibit copying costs. Shum v. 13 Intel Corp., 682 F.Supp.2d 992, 998 (N.D. Cal. 2009) (“A district court may reduce 14 costs . . . which are not supported by adequate documentation.”) Simplified, this 15 means that the Court removes $25.90 in exhibit copying costs for the first deposition 16 of Thomas Lin, $45.70 for the second deposition of Thomas Lin, $302.75 for the 17 deposition of Walter Bratic, $20.50 for the deposition of Martin Kaliski, and $466.45 18 for the second deposition of Martin Kaliski for a total deduction of $861.30.4 (See 19 Appl. Ex. B at 5, 7, 9, 11, 12, 13.) 2. Certification, Exemplification, and Reproduction of Documents 20 21 a. Physical Reproduction of Documents 22 The cost of a reproduction or copy may be taxed where it is “necessarily 23 obtained for use in the case” regardless of whether it is actually introduced into the 24 record or offered at trial. See In re Online DVD-Rental Antitrust Litig., 779 F.3d 914, 25 927 (9th Cir. 2015) (internal quotations omitted); see also Haagen-Dazs Co. v. Double 26 Rainbow Gourmet Ice Creams, Inc., 920 F.2d 587, 588 (9th Cir. 1990). However, 27 28 4 As the Court eliminated the vast majority of exhibit copying costs, it declines to address Plaintiff’s argument about the varying forms of exhibit copying that Defendant employed. (Mot. 6.) 7 1 such expenses must be sufficiently described and quantified (usually on a per page 2 cost basis). See Ancora Techs., Inc. v. Apple, Inc., No. 11-CV-06357 YGR, 2013 WL 3 4532927, at *2 (N.D. Cal. Aug. 26, 2013); see also Shum, 682 F.Supp.2d at 998. 4 Plaintiff argues that Defendant should not be allowed to recover $3414.54 for 5 the cost of copies used in preparation of its witnesses for deposition and $4,423.85 for 6 the cost of copies used in the examination of adverse witnesses. (Mot. 7.) The Court 7 disagrees. 8 specifically examining whether such fees are taxable, the Court finds that witness 9 preparation and examination are inherent parts of the litigation process, and thus 10 Though neither of the parties has supplied the Court with a case documents made for those purposes are necessarily obtained for use in the case. 11 The Court recognizes, as Plaintiff does in its motion, that at first glance the 12 copying expenses appear to indicate that tens of thousands of pages were copied for 13 these purposes. However, a closer examination of the invoices reveals that while 14 there were over a thousand documents copied, the vast majority of the expense comes 15 from color copying (black and white copies were charged at a rate of $.08-.12 per 16 page, while color copies were charged at a rate of $.45-65 per page).5 (Appl. Ex. D.) 17 Taking this fact into account, the Court finds that, overall, the copying expenses 18 claimed are reasonable for the preparation of five witnesses and examination of five 19 adverse witnesses. Id. (finding that the taxation of 5,000 copies was reasonable for a 20 three-year long case). The Court also finds that the costs are sufficiently described in 21 the documents supporting the application for costs. (Appl. Ex. D.) Therefore, the 22 Court upholds the Clerk’s determination. 23 24 25 26 27 28 5 The Court refuses to engage in a page by page analysis of the documents to determine whether the extra expense for color copying was warranted and instead relies on the representations of Plaintiff’s counsel that the expenses were necessarily incurred. Meier v. United States, No. C 05-04404 WHA, 2009 WL 982129, at *2 (N.D. Cal. Apr. 13, 2009) (declining to require copy-by-copy documentation and accepting the prevailing party’s identified copying costs as “necessarily incurred”). 8 1 b. Electronic Discovery 2 Costs associated with the production of electronic copies are taxable so far as 3 the copies are “obtained for use in the case.” See In re Online DVD-Rental Antitrust 4 Litig., 779 F.3d at 925-928; see also eBay Inc. v. Kelora Sys., LLC, No. C 10-4947 5 CW (LB), 2013 WL 1402736, at *4-5 (N.D. Cal. Apr. 5, 2013). Plaintiff argues that 6 the minimum charge for creation of a production module, the charge associated with 7 creating the DAT file, the “email service charge,” and the “labor charge for editing” 8 are not taxable as these expenses were not directly incurred in the copying process. 9 (Mot. 9.) 10 The Court disagrees with Plaintiff as to the minimum charges for production 11 modules. The receipts indicate that until the number of pages in a module reaches 12 several thousand, the e-discovery vendor prices its document production service by 13 the module (set of documents) instead of by the page. (Appl. Ex. E.) Plaintiff 14 contends that modules should have been combined in order to take advantage of the 15 per page pricing. (Mot. 9.) However, Plaintiff provides no evidence that the modules 16 could have actually been combined in this manner while maintaining the integrity and 17 organization of each module or that the e-discovery vendor would have been 18 amenable to such an arrangement. Thus, the Court finds these copying costs taxable. 19 The Court also disagrees with Plaintiff as to the DAT costs. As Defendant 20 correctly points out, the parties agreed that the e-discovery files would be put into a 21 DAT format. (Joint Agreement 2-5, ECF No. 20.) Inherent in this agreement is the 22 understanding that labor might be needed to conform the documents to the agreed- 23 upon format. The Court therefore finds the itemized expenses related to DAT creation 24 taxable. See Ancora Techs., Inc. v. Apple, Inc., 2013 WL 4532927, at *2 (finding e- 25 discovery costs taxable where they were incurred pursuant to an e-discovery 26 agreement between the parties); see also Jardin, 2011 WL 4835742, at *6 (holding 27 that expenses associated with formatting TIFF files were taxable). 28 9 1 Finally, the Court upholds the other contested e-discovery costs. (Mot. 9.) 2 Costs, including personnel expenses, related to the production of electronic copies are 3 recoverable. See Jardin, 2011 WL 4835742, at *9 (finding that costs related to the 4 production of electronic copies are taxable and specifically allowing recovery for the 5 cost of a project manager to oversee the electronic copying process); see also Tibble v. 6 Edison Int'l, No. CV 07-5359 SVW AGRX, 2011 WL 3759927, at *8 (C.D. Cal. Aug. 7 22, 2011) (implying that the complexity of electronic production may necessitate 8 awarding additional costs not traditionally associated with the production of paper 9 copies). Thus, the editing of a PDF is taxable, as it is a service performed to facilitate 10 the production of the requested electronic copies. The Court also allows recovery of 11 the “email service charge.” Other courts have allowed shipping costs related to the 12 mailing of physical documents; the emailing of electronic files is merely the 13 equivalent for electronic documents. See In re Ricoh Co., Ltd. Patent Litig., No. C 14 03-02289 JW, 2010 WL 8961328, at *5 (N.D. Cal. Sept. 29, 2010) (citing Ishida Co. 15 v. Taylor, No. C-02--1617-JR PVT, 2004 WL 2713067, at *1 (N.D. Cal. Nov. 29, 16 2004). 17 c. Miscellaneous Costs 18 Plaintiff also asserts that the costs Defendant seeks for tabs, envelopes and other 19 similar expenses are not taxable. (Mot. 8.) However, this argument is misplaced. As 20 Defendant properly notes, these expenses were necessarily incurred to satisfy the 21 Local Rules and the Court’s standing order. See L.R. 5-4.5, 11-3, 11-5.2, 11-5.3, 79- 22 5. The descriptions included with Plaintiff’s Application show that these costs were 23 restricted to court filings. (Appl. Ex. D.) Therefore, the Court does not alter the 24 Clerk’s previous determination with regard to these costs. 25 V. CONCLUSION 26 After thoroughly considering Plaintiff’s motion and reply and Defendant’s 27 opposition to the motion, the Court GRANTS Plaintiff’s motion as to costs associated 28 with the exhibit copying discussed above and DENIES Plaintiff’s motion as to the 10 1 remaining objections to the Clerk’s Bill of Costs. Accordingly, the Court orders 2 Plaintiff to pay $40,803 less the reductions discussed above ($861.30) for a total of 3 $39,941.70. 4 IT IS SO ORDERED. 5 6 September 30, 2016 7 8 9 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11
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