Opinion
97-CV-6182T (F)
December 13, 2000
DECISION and ORDER
INTRODUCTION
This patent infringement action is brought by plaintiff Xerox Corporation, ("Xerox"), against defendants 3Com corporation, U.S. Robotics Corporation, U.S. Robotics Access Corporation, (collectively referred to as "U.S. Robotics'), and Palm Computing, Inc., ("Palm"). By Order dated June 6, 2000, held that defendants' products did not infringe plaintiff's patent, granted defendants' motions for summary judgment, and dismissed plaintiff's claims with prejudice.
On July 6, 2000, defendants filed a bill of costs seeking reimbursement from the plaintiff the amount of $163,456.40 representing costs incurred in defending the action. Plaintiff, on July 5, 2000 filed its notice of appeal of this Court's Order granting summary judgment, and now opposes the defendants request for costs and moves for an Order directing that the parties bear their own costs, or, in the alternative, that taxation and payment of costs be stayed pending the appeal.
However, in the event that this court refuses to stay payment and does award costs to the defendants, plaintiff seeks an Order reducing defendants' request for costs from $163,456.40 to $5,297.18.
For the reasons that follow, I deny Xerox's motion for an Order directing that each party bear its own costs, and deny Xerox's motion for a stay. Xerox's motion to reduce defendants' costs is denied, and the Clerk of the Court is directed to determine the amount of costs to which defendants are entitled.
DISCUSSION
I. Applicable Law
Rule 54(d)(1) of the Federal Rules of Civil Procedure provides, in relevant part that: "[e]xcept when express provision therefore is made either in a statute of the United States or in these rules, costs other than attorneys' fees shall be allowed as of course to the prevailing party unless the court otherwise directs . . . ." Fed.R.Civ.P. 54(d) (1). The Rule is a hybrid of the traditional rules once employed at law and at equity and mandates that, subject to court intervention on equitable considerations, costs be awarded to the prevailing party as of course.
II. Plaintiff's Arguments Regarding Taxation of Costs
A. Partial Prevalence on the Issues
Plaintiff asks this court to utilize its discretion to deny defendants their costs on grounds that it should not be made to pay the defendants costs for issues on which the plaintiff prevailed. Specifically, Xerox refers to its successful opposition to the defendants' motions to change venue and for summary judgment on the issue of patent invalidity. Additionally, plaintiff points out that it successfully defended the validity of its patent before the Patent and Trademark office in a re-examination proceeding initiated by the defendants.
I find that the defendants are the prevailing parties in this case. The court rendered judgment in favor of the defendants, and, in the absence of other equitable considerations — none of which are applicable in this case — a party in whose favor judgment is rendered is generally the prevailing party for the purposes of awarding costs under Rule 54(d) Amarel v. Connel, 102 F.3d 1494 (9th Cir. 1996). This court granted the defendants' motion for summary judgment, and dismissed plaintiff's complaint in its entirety. Defendants are therefore the "prevailing parties" within the meaning of 54(d)(1).
The cases cited by plaintiff in support of its position that because it succeeded on certain issues means that it prevailed in those matters are inapposite. For example, in DLC Management Corporation v. Town of Hyde Park, 45 F. Supp.2d 314 (S.D.N.Y. 1999) the court denied costs to the defendant not only because of the plaintiff's good faith in bring the action, but also because the court determined that the defendant had litigated in bad faith. In Culp v. Zaccagnino, 2000 WL 35861 (S.D.N.Y. Jan. 18, 2000), the court denied defendant's motion for costs on grounds that the plaintiff, a prisoner proceeding pro se, was indigent. The instant case differs significantly from these cases in that Xerox is not indigent, and defendants have not litigated in bad faith.
B. Good Faith and Close Litigation
Plaintiff argues that the parties should bear their own costs because this action was brought in good faith, and because the litigation was close and difficult. While I accept both these propositions, they are not grounds for denying the defendants right to costs.
11. Good Faith
The Third Circuit Court of Appeals has stated that:
All parties to a federal action have an obligation to act in good faith and with proper purpose. . . . It follows that noble intentions alone do not relieve an unsuccessful litigant of the obligation under Rule 54 (d) to compensate his opponent for reasonable costs. "If the awarding of costs could be thwarted every time the unsuccessful party is a normal, average party and not a knave, Rule 54(d)(1) would have little substance remaining."
National Information Services, Inc. v. TRW, Inc., 51 F.3d 1470, 1472; 73 (9th Cir. 1995), overruled on other grounds by Association of Mexican;American Educators v. State of California, 231 F.3d 572, (9th Cir. 2000) (quoting Popeil Bros., Inc. v. Schick Electric, Inc., 516 F.2d 772, 776 (7th Cir. 1975)
2. Close, Difficult Litigation
Xerox argues that because this was difficult and closely contested litigation, the court should direct the parties to bear their own costs. In support of this contention, plaintiff relies on White White, Inc. v American Hosp. Supplies Corp., 786 F.2d 728, (6th Cir 1986), where the court held that the length and difficulty of a case alone would not be grounds for denying costs.
Patent disputes by their nature involve complex legal and technical arguments. Plaintiff contends that the case ran over three years, involved several summary judgement motions, depositions, discovery and two patent re-examinations before PTO. Nevertheless, I find that for a patent case, the length of this case has not been extraordinary. Moreover; I find that the issues were not extraordinarily complicated. "Federal Rule of Civil Procedure 54(d)(1) establishes that costs are to be awarded as a matter of course in the ordinary case." The Association of Mexican-American, 231 F.3d at ___). Because I find that this is an "ordinary case" for purposes of taxation of costs, I deny plaintiff's motion for an Order directing that each side bear its own costs. Considering all of plaintiff's arguments, I find that plaintiff has failed to establish that this is an extraordinary case in which taxation of costs is not appropriate.
C. Public Policy Grounds
Plaintiff suggests that awarding substantial costs to the defendants is likely to deter parties bringing good faith actions. I am not persuaded that awarding costs to the defendants in this case would ultimately discourage plaintiffs in the future from bringing patent infringement actions. Historically, patent actions prove to be costly by their very nature, yet that factor alone has not diminished patent litigation.
III. Plaintiff's Reguest for a Stay.
Rule 54(c) of the Local Rules of Civil Procedure squarely addresses plaintiff's request for relief, and provides that:
[u]nless otherwise ordered by the District Court or Circuit Court of Appeals, pursuant to Federal Rule of Appellate Procedure 8, the filing of an appeal shall not stay the taxation of costs, entry of judgement thereon, or enforcement of such judgment.
Loc. R. Civ. P. 54(c). It is clear that under the Local Rules, the filing of an appeal shall not stay an application for costs, nor shall it stay the issuance of a judgment on an application for costs. Plaintiff's motion for a stay is denied.
IV. Request to Reduce Costs
Local Rule of Civil Procedure 54(a) provides that "[w]ithin thirty days after entry of final judgment, a party entitled to recover costs shall submit to the Clerk, upon forms provided by the Clerk, a verified bill of costs." Loc. R. Civ. P. 54(a). In this District, costs are taxed by the Clerk of the Court rather than by District Judges. Once the Clerk has determined which costs may be taxed, an aggrieved party may move the Court to retax costs within five days of the Clerk's determination. Id.
In this case, the Clerk has not yet taxed costs to any party. Once costs are taxed, either party may move this court to retax costs. Accordingly, Xerox's motion to reduce costs is denied without prejudice as premature.
CONCLUSION
For the reasons set forth above, plaintiff's motion for an Order requiring the parties to bear their own costs or in the alternative to stay taxation of costs is denied. Plaintiff's motion to reduce costs is denied as premature. The Clerk of the Court is directed to consider defendants' verified bill of costs and tax costs as appropriate.
ALL OF THE ABOVE IS SO ORDERED.