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Judge Stark on Taxable Costs and Fee-Shifting

In the long-running and complex case of Honeywell International Inc., et al. v. Nokia Corp., et al. Judge Stark was recently tasked with reviewing the Clerk of Court’s determinations regarding taxation of costs of two prevailing defendants. Defendants FujiFilm and Samsung succeeding in invalidating the plaintiff’s patent-in-suit then filed Bills of Costs seeking $452,419.77 and $347,495.63 respectively. The Clerk granted only $85.80 of photocopy costs requested by Samsung and denied the balance of Bills of Costs. The defendants moved for a review of the Clerk’s orders, and Judge Stark considered the costs de novo, addressing both whether the costs where adequately supported and allowable and whether Local Rule 54.1 conflicts with Federal Rule 54 and 28 U.S.C. § 1920. Honeywell International Inc., et al. v. Nokia Corp., et al., C.A. No. 04-1337-LPS, Memo. Or. at 1-9 (D. Del. May 30, 2014).

The defendants argued “essentially that D. Del. LR 54.1 imposes requirements for taxation of costs that are not present in Section 1920, rendering the Local Rule impermissibly narrower than the statute.” For example, defendants pointed out that § 1920 makes transcript and copy costs taxable if they are “necessarily obtained for use in the case,” but the local rule requires transcripts to be “requested by the Court or prepared pursuant to stipulation” and copies to be “attached to a document required to be filed and served” or “admitted into evidence.” Id. at 10. As Judge Stark explained, however, LR 54.1 is a “proper exercise of the Court’s discretion, discretion which is recognized in Section 1920.” Because § 1920 states that “the Court ‘may’ tax costs to the losing party,” the local rule “provides guidance to counsel and litigants as to how this Court has chosen, as a general matter, to exercise its discretion with respect to taxation of costs.” Id. Further, the local rule limits on the items which the Clerk “shall” tax, without limiting the items that the Court might tax, and the Court has greater discretion in taxing costs than the Clerk. Id. at 10-11. Judge Stark therefore found that LR 54.1 was not in conflict with § 1920.

Turning to the specific taxation requests at issue, Judge Stark first found that the defendants had provided “adequately detailed and clear support for the costs,” including “four declarations, attaching in excess of 600 pages of invoices, bills, and summaries of work.” Although Honeywell sought to impose a high standard on the bill of costs to clearly describe each item, Judge Stark noted that “[i]n the context of complex patent litigation, it would be unreasonable to require a party to track and articulate the relevance of each specific document produced in discovery, each deposition noticed, and each exhibit designated for use at trial.” Id. at 12-13. His Honor then considered each category of costs individually, in some cases affirming and in other cases reversing the Clerk’s determinations.

Interestingly, Judge Stark also noted the Supreme Court’s recent decisions in Octane Fitness and Highmark when he mentioned in passing the defendants’ previously-denied motions for an exceptional case finding. Judge Stark indicated that he would order the parties to submit a joint status report regarding whether the Court “can and/or should reevaluate its prior ruling with respect to attorneys fees in light of the recent Supreme Court rulings.” Id. at 4 n.6.

Honeywell International Inc., et al. v. Nokia Corp., et al., C.A. No. 04-1337-LPS (D. Del. May 30, 2014).

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