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Federal Circuit decides which electronic document production costs are taxable “costs of making copies”

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The Fed. Cir., applying Eleventh Circuit law, reverses in part and vacates in part an award of “costs” under 28 U.S.C. § 1920(4).   That provision permits a court to award the prevailing party “the costs of making copies of any materials where the copies are necessarily obtained for use in the case.”  The issue was which costs associated with producing electronic documents, if any, are recoverable.  

CBT Flint Partners, LLC v. Return Path, Inc., ___ F.3d ___ (Fed. Cir. Dec. 13, 2013) (Dyk, O’Malley (dissenting in part), TARANTO) (N.D. Ga.: Thrash) (2 of 5 stars)

After reviewing a recent legislative amendment to § 1920 and precedent related to this statute, the Fed. Cir. held that “[t]o the extent that a party is obligated to produce (or obligated to accept) electronic documents in a particular format or with particular characteristics intact (such as metadata, color, motion, or manipulability), the costs to make duplicates in such a format or with such characteristics preserved are recoverable . . . . [b]ut only the costs of creating the produced duplicates are included, not a number of preparatory or ancillary costs commonly incurred leading up to, in conjunction with, or after duplication.”  Slip op. at 9-10.

Applying this standard, the following costs were recoverable:

(1) copying (imaging) documents and associated metadata from source media if they are actually produced,

(2) creating “load files” that associate images and metadata with a particular document,

(3) copying responsive documents to production media, and

(4) if confidential source code must be produced, then the costs of providing a secured computer, installation of requested software, and copying the files to the computer.

The following costs were not recoverable:

(1) keyword searching,

(2) de-duplication,

(3) project management,

(4) statistical previews,

(5) auditing and logging of files,

(6) extraction of proprietary data, acquiring,

(7) installing and configuring a new onsite data-hosting server,

(8) training in the use of document review software, and

(9) planning, preparation, and coordination of source code review.

Costs for prior art searches are also not recoverable under § 1920(4).

Judge O’Malley dissented in part and would have found that the initial imaging of source media and the extraction of metadata are not recoverable costs because they were more akin to “gathering” documents as a “prelude to duplication,” not “making copies.”

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Joanna Fuller

Joanna Fuller represents pharmaceutical and high tech clients in Hatch-Waxman and patent litigation nationwide. Her cases have encompassed a wide range of technology, including pharmaceuticals, video coding, backup and recovery software, GPS technology, medical software, network security software, and email encryption. Learn more about Joanna.

Craig Countryman

A Principal in Fish's Southern California office, Craig's practice involves patent litigation in all areas of technology. Prior to joining the firm, Craig was an Extern for the Major Crimes Division of the Los Angeles District Attorney's Office (2005). Learn more about Craig.

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