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Supreme Court Takes Case on Copyright Litigation Costs Awards

The U.S. Supreme Court recently agreed to hear a new copyright case, Rimini Street Inc. v. Oracle USA Inc., regarding the recovery of costs in copyright infringement litigations. While it is a particularly dry subject — even for copyright law — it can make the difference between being able to bring or stay in a litigation or not. The Supreme Court in Rimini will determine what the meaning of “full costs” is under § 505 of the Copyright Act. Specifically, the Court will decide whether “full costs” is limited to taxable costs, or extends to non-taxable costs.

The case between Rimini Street and Oracle began way back in 2010 and involved a copyright infringement suit against Rimini Street. Oracle alleged that “Rimini Street downloaded Oracle’s support materials without a license,” infringing 93 of Oracle’s copyrights. The district court found in favor of Oracle on its copyright infringement claims and ordered Rimini Street to pay over $50 million in damages, bringing its total verdict amount to over $124 million. Rimini Street appealed the decision to the Court of Appeals for the Ninth Circuit, arguing that the court improperly included over $12 million in non-taxable costs, which Rimini Street sought to recover. The Ninth Circuit disagreed with Rimini Street, finding that “§ 505 permits the award of full costs . . . [and] is not limited to” only taxable costs. The Supreme Court in this case will resolve a circuit split on this issue and determine which view reigns.

What are taxable costs and non-taxable costs, and why are they important?
Under 28 U.S.C. § 1920 and 1821, there are specific categories of costs that are taxable against the losing party and may be awarded to the winning party. Taxable costs include fees for services such as fees for the cost of making copies and compensating court appointed experts as well as fees and disbursements for printing and witnesses. Non-taxable costs, include expenses most familiarly associated with litigation, such as “investigative fees, [and] fees for party-retained experts.”

Both taxable and non-taxable costs usually aren’t cheap and can end up costing a party thousands, if not, millions of dollars. If a party can’t recover its non-taxable costs, it could lose out on an exponential amount of money used in arguing its case. For example, Oracle’s “recovery of ‘non-taxable costs’ involves more than $17 million, including $8 million in electronic discovery expenses and $7.8 million in expert fees.”

By addressing the meaning of “full costs,” the Court will provide copyright litigants with a clear interpretation of cost recovery and “whether, and for how long, [litigants] should pursue copyright claims given the possibility of post-victory recovery of expenses that must be incurred to litigate these disputes.”