BakerHostetler Patent Watch CBT Flint Partners, LLC v. Return Path, Inc.

by BakerHostetler


To 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 under [28 U.S.C. § 1920(4)]. But 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.

On December 13, 2013, in CBT Flint Partners, LLC v. Return Path, Inc., the U.S. Court of Appeals for the Federal Circuit (Dyk, O'Malley, Taranto*) reversed-in-part, vacated-in-part and remanded the district court judgment that CBT pay the defendants their costs, which the clerk taxed at $49,824.60 for Return Path and $268,311.12 for Cisco, following the stipulated judgment that the defendants did not infringe U.S. Patents No. 6,192,114 and No. 6,587,550, which related to devices for determining whether a sending party sending an electronic mail communication directed to an intended receiving party is an authorized sending party, and the summary judgment that the asserted claim of the '550 patent was indefinite. The Federal Circuit stated:

Federal Rule of Civil Procedure 54(d)(1) authorizes district courts to award costs to the prevailing party. In turn, 28 U.S.C. § 1920 "enumerates expenses that a federal court may tax as a cost under the discretionary authority found in Rule 54(d)." Thus, section 1920 operates as a limitation on a court's discretion to award costs under Rule 54(d)(1). The scope of that limitation -- specifically, the meaning of section 1920(4) -- is the subject of CBT's appeal. We review the district court's interpretation of section 1920(4) de novo, applying the law of the regional circuit (in this case, the Eleventh Circuit). Subject to a proper interpretation of section 1920(4), we review the district court's award of costs for abuse of discretion.

Before [2008], section 1920(4) covered "[f]ees for exemplification and copies of papers necessarily obtained for use in the case." Congress changed the language [to] encompass electronically stored information as well as information on paper. Section 1920(4) now covers "[f]ees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case." [W]e conclude that recoverable costs under section 1920(4) are those costs necessary to duplicate an electronic document in as faithful and complete a manner as required by rule, by court order, by agreement of the parties, or otherwise. To 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 as "the costs of making copies. . . necessarily obtained for use in the case." But 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.

In this case, some of the costs taxed against CBT clearly come within section 1920(4), while others clearly fall outside it. To indicate why, and to try to guide the necessary work of locating particular expenses on one side of the line or the other, we review the document production process used in this case. . . . At stage one, an electronic-discovery vendor copied (or "imaged") computer hard drives or other "source media" that contain the requested documents, replicating each source as a whole in its existing state. The vendor then processed the whole-source images to extract individual documents, leaving the documents' original properties intact. At stage two, the extracted documents were organized into a database. They were then indexed, decrypted, and deduplicated, and filtered, analyzed, searched, and reviewed to determine which were responsive to discovery requests and which contained privileged information. These processes resulted in identification of a subset of documents for production. At stage three, the documents selected for production were copied onto memory media, such as hard drives or DVDs, or, in the case of source code, onto a secured computer. Such "production media" were then delivered to the requester CBT or, in the case of source code, made available for review in a secured location. In this case, unlike other cases, the documents were not converted to an "image file" format, such as Tagged Image File Format (TIFF), because Cisco believed that such conversion would be too expensive. . . .

Return Path and Cisco seek to recover under section 1920(4) the costs of a host of their vendors' services that fall under what we have called stage two. Examples are activities that they characterize as project management, keyword searching, "statistical previews," "auditing and logging of files and ensuring compliance with Federal Rules," and "extraction of proprietary data," among others. The costs of those activities are not the costs of making copies. Rather, they are part of the large body of discovery obligations, mostly related to the document-review process, that Congress has not included in section 1920(4). Similarly, the costs incurred in acquiring, installing, and configuring a new data-hosting server at the offices of Cisco's counsel were clearly incurred for the convenience of Cisco and its counsel and are not recoverable. Neither should a party be able to recover the costs of litigation-support tasks such as training in the use of the document-review software, deposition support, or production-and privilege-log creation. Costs of other activities listed on the vendor's invoices here, such as meetings, conference calls, and other communications, also are not costs of "making copies," even when they relate to the copying process.

Although Cisco argues that much of the keyword searching and data analysis performed by the vendor in this case was at CBT's request, that is plainly insufficient to bring an activity within section 1920(4). The provision covers only "making copies." Although the requester's demands can define the number, form, and other characteristics of copies chargeable under section 1920(4), the requester's demands for activities other than making copies does not bring those non-copying activities within the provision. A litigant faced with what it views as overbroad discovery requests or vexatious discovery tactics -- or even unduly fruitless or burdensome negotiations over discovery obligations -- must pursue relief by other means, such as seeking court orders to limit the discovery when the problems arise or seeking reimbursement of costs or fees or payment of penalties afterwards under authority other than section 1920(4).

Applying section 1920(4) to various other stage-two tasks involved in electronic-document production calls for some common-sense judgments guided by a comparison with the paper-document analogue. Thus, decryption of a document stored in encrypted form on an electronic source medium may be necessary to make a final production copy that is viewable by the requester, but we conclude that the cost to decrypt is not recoverable. After the original creators or users of an electronic document have viewed it in readable form, it may have been put into an encrypted form for safekeeping. If so, the process of decryption to restore it to the form in which its creators and users saw it is something that is best understood as preceding copying, not as part of copying. By analogy, if a party chooses to store paper documents in a secure way -- say, to place them in a safe in remote Tuva -- the party's expense in removing them from such security, and getting them to the duplication machine, would not naturally constitute "making copies." Decryption of electronic documents is similar enough that it too should not constitute making copies. Likewise, deduplication is not fairly covered by section 1920(4). Deduplication is the culling of a set of documents to eliminate duplicate copies of the same document, creating a smaller set for production or review. This is either pre- or post-copying activity (depending on when the culling is done), not itself the making of copies. This process may well be valuable to both sides in making post-copying review more efficient, and the parties can agree on who incurs the cost. But it is not a cost of "making copies.". . .

As to stage three, there is no dispute among the parties that the costs of copying responsive documents to production media are recoverable under section 1920(4). We agree. These costs as they relate to the production of source code in this case warrant separate mention. Where legitimate trade-secret concerns entitle a producing party to use a special form of production media (such as making production copies available for review on a secured computer, rather than allowing the requester to take possession of the production copies), the costs of such production media are recoverable under section 1920(4). Covered costs include the costs incurred in providing a secured computer for the time the requester is entitled to access to it, installing on the secured computer whatever review software the requester requires, and copying the source code files to the secured computer. As noted above, costs incurred in planning, preparation, coordination, and communications associated with those tasks are not recoverable.

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.

© BakerHostetler | Attorney Advertising

Written by:


BakerHostetler on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.