Court Opinion

ID: 4650093
Source: CourtListenerOpinion
Date Created: 2021-01-08 16:00:40.497209+00
Date Added: 2024-06-11T09:01:58.894492
License: Public Domain

Case: 20-1669   Document: 43     Page: 1   Filed: 01/08/2021

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

     PARALLEL NETWORKS LICENSING, LLC,
               Plaintiff-Appellant

                            v.

            MICROSOFT CORPORATION,
                 Defendant-Appellee
               ______________________

                       2020-1669
                 ______________________

     Appeal from the United States District Court for the
 District of Delaware in No. 1:13-cv-02073-KAJ-SRF, Cir-
 cuit Judge Kent A. Jordan.
                  ______________________

                Decided: January 8, 2021
                 ______________________

    CHRISTOPHER THOR BOVENKAMP, McKool Smith, PC,
 Dallas, TX, for plaintiff-appellant. Also represented by
 LEAH BURATTI, JOHN BRUCE CAMPBELL, JAMES ELROY
 QUIGLEY, Austin, TX; RAYMOND MITCHELL VERBONCOEUR,
 Washington, DC.

    NITIKA GUPTA FIORELLA, Fish & Richardson, PC, Wil-
 mington, DE, for defendant-appellee. Also represented by
 JUANITA ROSE BROOKS, JASON W. WOLFF, San Diego, CA.
                 ______________________
Case: 20-1669    Document: 43      Page: 2    Filed: 01/08/2021

 2               PARALLEL NETWORKS LICENSING     v. MICROSOFT
                                                CORPORATION

     Before MOORE, HUGHES, and STOLL, Circuit Judges.
 MOORE, Circuit Judge.
     Parallel Networks Licensing, LLC, appeals a United
 States District Court for the District of Delaware order
 awarding costs under 28 U.S.C. § 1920 to Microsoft Corpo-
 ration for depositions, documents, and trial exhibits.
 J.A. 1–3. For the following reasons, we affirm-in-part, va-
 cate-in-part, and remand.
                        BACKGROUND
     Parallel Networks sued Microsoft in the District of Del-
 aware for patent infringement. The district court granted
 summary judgment of no indirect infringement, and a jury
 returned a verdict of no direct infringement.
     Microsoft, as the prevailing party, then submitted a bill
 of costs, declaring $191,130.18 in total taxable costs. It
 identified $38,421.30 for deposition transcript and record-
 ing fees, $8,445.50 for trial transcript fees, $71,708.20 for
 trial exhibit fees, and $72,555.18 for document production
 fees. J.A. 1000, 1003. The district court clerk denied the
 entire bill of costs. J.A. 4–8. Microsoft filed a motion with
 the district court to review the taxation of costs, and Par-
 allel Networks opposed. The district court granted costs in
 the amount of $182,684.68, only denying the trial tran-
 script costs.      Parallel Networks appeals, disputing
 $153,775.10 of the $182,684.68 award. Microsoft seeks af-
 firmance of $141,488.28 of the $182,684.68 award: the full
 award for deposition transcripts and for trial exhibits, and
 $31,358.78 of the $72,555.18 award for document produc-
 tion. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
                         DISCUSSION
     As relevant to this appeal, a district court may tax as
 costs under § 1920: “(2) Fees for printed or electronically
 recorded transcripts necessarily obtained for use in the
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 PARALLEL NETWORKS LICENSING        v. MICROSOFT                 3
 CORPORATION

 case; . . . [and] (4) Fees for exemplification and the costs of
 making copies of any materials where the copies are neces-
 sarily       obtained    for     use    in    the    case. . . .”
 28 U.S.C. § 1920(2), (4). We review the award of costs un-
 der § 1920 according to the law of the regional circuit law,
 in this case Third Circuit law. Summit Tech., Inc. v. Nidek
 Co., 435 F.3d 1371, 1374 (Fed. Cir. 2006). Under Third Cir-
 cuit law, there is a “strong presumption” that costs are to
 be awarded to the prevailing party, and we review a district
 court’s award of costs for abuse of discretion. In re Paoli
 R.R. Yard PCB Litig., 221 F.3d 449, 458, 462 (3d Cir. 2000),
 as amended (Sept. 15, 2000). “Whether a particular ex-
 pense may be recovered under section 1920 is an issue of
 statutory construction, subject to de novo review.” Sum-
 mit, 435 F.3d at 1374.
                                A
     Parallel Networks disputes $20,388.50 of the
 $38,421.30 the district court awarded Microsoft for deposi-
 tion costs. It argues that the district court lacked statutory
 authority to grant the following costs:
         •   Realtime transcription ($2,793);
         •   Laptop fees ($180);
         •   Litigation package fees ($275);
         •   Rough transcripts ($3,931.20);
         •   Certified Early Transcripts ($2,190.60);
         •   Video services and “video extended” fees
             ($5,263.75); and
         •   Exhibits ($5,754.95).
      In taxing all deposition costs against Parallel Net-
 works, the district court explained, “[a]s to the fees for dep-
 osition transcripts and deposition recordings . . . [Parallel
 Networks’] argument is solely that Microsoft was not spe-
 cific enough in its justification under [Delaware] Local Rule
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 4                PARALLEL NETWORKS LICENSING     v. MICROSOFT
                                                  CORPORATION

 54.1. But, having seen at trial and in motions practice that
 discovery record has been put to good use, and concluding
 that the depositions have aided in the resolution of mate-
 rial issues, I order the taxation of the deposition costs.”
 J.A. 1–2 (citing § 1920(2)). The district court did not ad-
 dress, however, Parallel Networks’ argument that the costs
 delineated above are not taxable. See J.A. 1231, 1233.
     Section 1920 permits the recovery of “[f]ees for printed
 or electronically recorded transcripts necessarily obtained
 for use in the case.” The district court’s analysis addressed
 “deposition transcripts and deposition recordings” but then
 ordered the taxation of “the deposition costs.” Microsoft ar-
 gues that because the depositions themselves were neces-
 sary, it should be entitled to all of the challenged costs,
 even costs which can be fairly characterized as conven-
 ience, not necessary, costs such as realtime transcription
 or early transcripts. And it is entirely unclear what the
 fees delineated as laptop fees and litigation package fees
 even are much less whether they were necessary for the
 printed or recorded transcript of any deposition. It is not
 enough that the depositions themselves were “necessary,”
 § 1920(2) allows only for “[f]ees for printed or electronically
 recorded transcripts necessarily obtained for use in the
 case.” We thus vacate and remand for the district court to
 consider whether these fees are the type that the Third Cir-
 cuit would agree constitute fees for printed or electronically
 recorded transcripts or whether such convenience fees are
 beyond the scope of taxable costs.
                               B
     The district court granted Microsoft’s $71,708.20 in
 costs for trial exhibits. Parallel Networks does not dispute
 that fees for trial exhibits are taxable under § 1920(4). In-
 stead, Parallel Networks reiterates the arguments it made
 to the district court that (1) Microsoft provided insufficient
 detail to assess the necessity of printing close to 650,000
 pages of trial exhibits and (2) that costs for labels and
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 PARALLEL NETWORKS LICENSING       v. MICROSOFT                 5
 CORPORATION

 folders for those exhibits are not taxable. Microsoft re-
 sponds by pointing to Ronald P. Golden III’s Declaration in
 Support and Verification of Microsoft’s Bill of Costs, which
 attached an invoice for the $71,708.20 amount, and which
 explained that the amount represented the costs for print-
 ing trial exhibits and the labels and folders associated with
 those exhibits. J.A. 1021, 1201.
       Trial exhibit copies and their associated folders and la-
 bels are taxable costs. See § 1920(4); see also, e.g., In re
 Ricoh Co., Ltd. Patent Litig., 661 F.3d 1361, 1368 n.3
 (Fed. Cir. 2011) (it would not be an abuse of discretion to
 award costs for tabs and folders if “related to categories of
 documents as to which the recovery of reproduction costs
 under section 1920(4) is appropriate”). Given that these
 types of costs are taxable under § 1920(4), we review the
 district court’s award of these costs for abuse of discretion.
 Race Tires Am., Inc. v. Hoosier Racing Tire Corp., 674 F.3d
 158, 167–68 (3d Cir. 2012). Contrary to Parallel Networks’
 argument, there is no statutory requirement that copies be
 admitted at trial in order to recover costs for those copies.
 See § 1920(4); see also In re Ricoh, 661 F.3d at 1367 (apply-
 ing Ninth Circuit law) (section 1920(4) “does not require
 . . . that the copies actually be used in the case or made part
 of the record.”). Because the invoice attached to the Golden
 Declaration seems to be reasonably consistent with a com-
 mercial exhibit printing order, the district court acted
 within its discretion in taxing these costs in what it deemed
 to be a complex patent litigation.
                               C
     Microsoft only seeks affirmance of $31,358.78 of the
 $72,555.18 the district court awarded for document produc-
 tion costs. Parallel Networks agrees that $10,876.78 of the
 $31,358.78 amount is recoverable as costs for entries in Ex-
 hibit 36 to the Golden Declaration titled “Ebates,” “Elec-
 tronic Bates Number or POD,” “Native Conversion to
 TIFF/PDF,” and “OCR Processing.” Microsoft explains
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 6               PARALLEL NETWORKS LICENSING     v. MICROSOFT
                                                CORPORATION

 that the remaining $20,482.00 represents the total amount
 of “Production – Image Conversion and Export” entries in
 Exhibit 36 to the Golden Declaration. J.A. 1122–1191. De-
 spite agreeing that costs such as “Native Conversion to
 TIFF/PDF,” and “OCR Processing” are taxable, Parallel
 Networks argues that “Production – Image Conversion and
 Export” costs are not taxable as “costs of making copies”
 under 28 U.S.C § 1920(4). We do not agree.
     The Third Circuit has held that “scanning and conver-
 sion of native files to the agreed-upon format for production
 of ESI constitute ‘making copies of materials’” under 28
 U.S.C. § 1920(4). Race Tires, 674 F.3d at 167. Because
 these costs are taxable under § 1920(4) and are reasonably
 supported by the Golden Declaration, we see no abuse of
 discretion in the district court’s award of $31,358.78, which
 includes the “Production – Image Conversion and Export”
 costs. 1
                        CONCLUSION
      Because the district court did not abuse its discretion
 in its award of the trial exhibit costs and the document pro-
 duction costs, we affirm-in-part. We vacate-in-part the dis-
 trict court’s award of the challenged deposition costs and
 remand for a determination of whether these costs were
 “[f]ees for printed or electronically recorded transcripts
 necessarily obtained for use in the case.”

     1   Parallel Networks argues that Microsoft has not
 shown that the disputed $20,482 was part of the district
 court’s $72,555.18 award. A review of Exhibit 36 shows a
 net total of $72,555.18 for all of the itemized entries, in-
 cluding the “Production – Image Conversion and Export”
 entries. J.A. 1191. It is clear, therefore, that the $20,482
 was part of the district court’s award.
Case: 20-1669   Document: 43     Page: 7      Filed: 01/08/2021

 PARALLEL NETWORKS LICENSING   v. MICROSOFT                 7
 CORPORATION

   AFFIRMED-IN-PART, VACATED-IN-PART, AND
                 REMANDED