U.S. Supreme Court Clarifies Meaning of “Full Costs” Under Copyright Law

U.S. Supreme Court Clarifies Meaning of “Full Costs” Under Copyright Law

In Rimini Street, Inc. v. Oracle USA, Inc., 586 U.S. ___ (2019), the U.S. Supreme Court clarified that the award of “full costs” to a party in copyright litigation under 17 U.S.C. § 505 of the Copyright Act, does not expand the categories of expenses that may be awarded as “costs” as enumerated in the general federal cost statute.

Recouping Costs in a Copyright Infringement Suit

Under 17 U.S.C. § 505 of the Copyright Act, a court may allow the recovery of “full costs” by or against any party, other than the United States or its officers, including an award of reasonable attorneys’ fees.

Generally, there are six discrete categories of “taxable costs” that are available to prevailing parties under federal statutory fee-shifting provisions: (1) fees for the clerk and marshal; (2) transcript fees; (3) disbursements for printing and witnesses; (4) fees for making copies; (5) docketing fees; and (6) the compensation of court-appointed experts and certain special interpretation services.  See 28 U.S.C. § 1920.  Another federal statute, Section 1821, delineates witness attendance rates ($40-per-day), as well as per diem rules for witness travel expenses.  All other cost categories or amounts in excess of the fixed rates are considered “non-taxable.”

Facts of Rimini Street

In Rimini Street, Inc. v. Oracle USA, Inc., Oracle, a computer software developer, sued Rimini, a software maintenance provider, under the Copyright Act.  Oracle claimed that Rimini, in the course of providing software support services to Oracle customers, copied Oracle’s software without licensing it.

A jury found for Oracle, determining that Rimini violated the Copyright Act by infringing on various Oracle copyrights.  After judgment, the District Court ordered the defendant to pay various amounts of costs and attorneys’ fees, including $12.8 million for litigation expenses, such as expert witnesses, e-discovery, and jury consulting.

Despite the fact that fees for expert witnesses, e-discovery, and jury consulting are not included in the six categories of fees delineated in the general federal statutes, 28 U.S.C. §§1821 and 1920, the Ninth Circuit Court of Appeals affirmed the $12.8 million award.  The Ninth Circuit determined the award was appropriate because the language of the Copyright Act gives federal district courts discretion to award “full costs,” a term that is not confined to the six categories identified above.

Supreme Court’s Decision in Rimini Street

The U.S. Supreme Court reversed the Ninth Circuit in a unanimous decision.  In coming to its decision, the Court analyzed prior case law interpreting the general federal statutes regarding fee-shifting and defined the meaning of the term “full costs.”

Initially, the Court recognized that while 28 U.S.C. §§1821 and 1920 created a “default rule” for the awarding of litigation expenses, Congress may, if it deems appropriate, authorize awards beyond the six categories of expenses.  The Court cited several cases in which an award of fees beyond the six categories was reversed because the specific fee-shifting provision did not expressly authorize fees beyond the categories set forth in 28 U.S.C. §§1821 and 1920.  See Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441 (1987); Arlington Central Sch. Dist. Bd. of Educ. v. Murphy, 548 U.S. 291, 297 (2006).

The Court concluded that these cases set forth a clear standard: “A statute awarding ‘costs’ will not be construed as authorizing an award of litigation expenses beyond the six categories,” unless there is explicit statutory instruction otherwise.  As the Copyright Act does not expressly call for the awarding of fees for expert witnesses, e-discovery, and jury consulting, this award cannot stand.

Next, the Court rejected Oracle’s argument that the word “full” authorizes courts to award expenses beyond the costs specified in §§1821 and 1920.  As Justice Kavanaugh noted, the term “full” is an adjective that means the complete measure of the noun it modifies.  In this case, “full” modifies the term “costs,” which refers to all of the “costs” otherwise available under the federal cost statutes—§§1821 and 1920.  Thus, “full costs” only refers to the full measure of fees available within the six categories of fees.

The Court also found no merit to Oracle’s argument that the term “full costs” in the Copyright Act is a historical term of art that encompasses more than the “costs” listed in §§1821 and 1920.  Citing the Court’s decision in Crawford Fitting, Justice Kavanaugh explained that courts should not undertake extensive historical excavation to determine the meaning of costs statutes and that §§1821 and 1920 apply regardless of when individual subject-specific costs statutes were enacted.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Nicholas Pellegrino, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.