US Supreme Court Agrees to Tackle Dispute Over Copyright Costs

US Supreme Court Agrees to Tackle Dispute Over Copyright Costs

The U.S. Supreme Court recently added another intellectual property case to its docket. In Rimini Street, Inc. v. Oracle USA Inc., the justices will determine the scope of available costs that may be recovered in a copyright infringement action.

Awarding Costs in a Copyright Infringement Suit

The U.S. Copyright Act dictates the fees that a prevailing party can recoup in a copyright infringement suit. Under 17 U.S.C. § 505, a court may allow the recovery of full costs by or against any party other than the United States or its officers and may also award a reasonable attorneys’ fee to the prevailing party as part of the costs.

Another federal statute, 28 U.S.C. § 1920, sets out six discrete categories of “taxable costs” that are available to prevailing parties under federal statutory fee-shifting provisions. They include fees for the clerk and marshal; transcript fees; disbursements for printing and witnesses; fees for making copies; docketing fees; and the compensation of court-appointed experts and certain special interpretation services. Another provision, 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.”

Of course, Congress may expand the universe of recoverable costs via statute. However, prior Supreme Court decisions establish that courts should not presume Congress has done so absent “explicit statutory … authorization.”

Facts of Rimini Street, Inc. v. Oracle USA Inc.

The issue before the U.S. Supreme Court in Rimini Street, Inc. v. Oracle USA Inc. is whether the “full cost” provision of the Copyright Act is limited to “taxable costs,” an issue that has divided the U.S. federal courts of appeal. Two federal appellate courts have held that non-taxable costs are not recoverable under the Copyright Act. For instance, in Pinkham v. Camex, Inc., 84 F.3d 292 (8th Cir. 1996), the Eighth Circuit held that the words “full costs” did not “‘clearly,’ ‘explicitly,’ or ‘plainly,’ evidence congressional intent to treat 17 U.S.C. § 505 costs differently from costs authorized in other statutes.”

The Ninth Circuit reached the opposite conclusion in the dispute between Oracle USA Inc. (Oracle) and Rimini Street, Inc. (Rimini). In 2010, Oracle filed suit in federal district court against Rimini, alleging numerous causes of action, ranging from copyright infringement to computer hacking. The jury awarded hypothetical license damages for innocent infringement in the amount of $35,600,000 and damages of just over $14 million for violations of state computer hacking statutes. Post-trial, Oracle sought approximately $20 million in costs, which included more than $12 million in non-taxable costs. Rimini objected to the award of the non-taxable costs, arguing that any costs awarded under the Copyright Act were limited to taxable costs permitted by 28 U.S.C. §§ 1920 and 1821. The district court, however, followed Ninth Circuit precedent holding that the Copyright Act “permits a successful plaintiff to recover all costs incurred in litigation, not just taxable costs authorized by … 28 U.S.C. § 1920.”

The Ninth Circuit affirmed, also largely relying on its prior decision in Twentieth Century Fox Film Corp. v. Entm’t Distrib., 429 F.3d 869 (9th Cir. 2005). In that case, the appeals court upheld tens of thousands of dollars in non-taxable costs under the Copyright Act, determining that the word “full” in the Copyright Act was “clear evidence of congressional intent that non-taxable costs should be available.”

Issues before the US Supreme Court

On appeal, Rimini argues that the Ninth Circuit’s decision conflicts with the precedent established by other federal circuit courts and the U.S. Supreme Court. It is seeking to recoup $12.8 million in litigation costs that were awarded by the Ninth Circuit. Meanwhile, Oracle contends that the term “full costs” means the non-prevailing party must pay the full costs, without exception.

On September 27, 2018, the U.S. Supreme Court granted certiorari. The specific question before the Court is: “Whether the Copyright Act’s allowance of “full costs” (17 U.S.C. § 505) to a prevailing party is limited to taxable costs under 28 U.S.C. §§ 1920 and 1821, as the Eighth and Eleventh Circuits have held, or also authorizes non-taxable costs, as the Ninth Circuit holds.”

Oral arguments have not yet been scheduled in Rimini Street, Inc. v. Oracle USA Inc. The Scarinci Hollenbeck Intellectual Property Group will continue to monitor the case and will post updates as they become available.

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, Bill Samuels, or the Scarinci Hollenbeck attorney with whom you work at 201-806-3364.