Judge Forrest Denies Attorneys’ Fees and Ancillary Electronic Discovery Costs

by Robins Kaplan LLP
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Realtime Data, LLC d/b/a IXO v. CME Group, Inc.

Case Number: 1:11-cv-06697-KBF (Dkt. 921)\

Rejecting claims that the matter was “exceptional” under 35 U.S.C. § 285 so as to permit the recovery of attorneys’ fees, Judge Forrest declined to award fees incurred between the court’s Markman order and order on summary judgment.  In Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct. 1749 (2014), the Supreme Court held an “exceptional” case to be one that stands out from others with respect to the substantive strength of a party’s position or the unreasonable manner in which the case was litigated.  Noting that “exceptional” cases are not merely those involving sanctionable conduct, Judge Forrest recognized the court’s discretion to consider the totality of the circumstances on fee petitions.

Defendants argued that the plaintiff should have given up its case following the court’s Markman order, and its refusal to do so necessitated defendants’ motion for summary judgment, which was ultimately granted.  Judge Forrest rejected this argument by relying on a decision from a district court in the Central District of California, reasoning that if plaintiffs were to be dissuaded from pursuing their case following claim construction, there would be no avenue for an appeal on an appropriate record.  Judge Forrest also rejected the fee request on the basis that plaintiff’s privilege log required significant revisions, as there was no indication the plaintiff acted unreasonably.  For the same reasons, Judge Forrest also declined to award fees as sanctions because there was nothing to suggest the plaintiff acted in bad faith or vexatiously in litigating the action.

Defendants also sought costs for electronic document copying and ancillary services, such as conversions to TIFF and preservation of metadata.  Doing so, defendants requested Judge Forrest to turn to other courts for guidance, as the Second Circuit has yet to address the issue of whether and how such costs are covered by 28 U.S.C. § 20.  Judge Forrest noted that the Federal Circuit (interpreting Eleventh Circuit law) found such costs to be taxable, while the Third and Fourth Circuits took a narrower view by denying ancillary and preparatory copying services. Noting that district courts are likewise split, Judge Forrest held that in the absence of Second Circuit precedent or a local rule instructing otherwise, the sought after costs of approximately $120,000 were beyond the applicable statutory framework, which only permit for “incidental” costs, and limited defendants’ recovery to $30,000.  Finally, Judge Forrest held that costs of deposition transcripts were properly taxed because they were not merely obtained for investigatory purposes, but instead were for “use in the case”, as they were submitted in connection with summary judgment motions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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