The U.S. Supreme Court has chosen an expensive battle between Oracle Corp. and third-party software support company Rimini Street Inc. to resolve a circuit split over cost-shifting in copyright cases.
The court granted Rimini Street and CEO Seth Ravin’s petition for certiorari, which contends the U.S. Court of Appeals for the Ninth Circuit improperly affirmed a $12 million award of nontaxable costs as part of a roughly $75 million award, plus attorneys fees, for Rimini Street’s copyright infringement.
Rimini and a Gibson, Dunn & Crutcher team led by partner Mark Perry argued in their petition for certiorari that only the taxable costs outlined in 28 USC 1920 and 1821—which include transcript fees, printing costs and reimbursement for court-appointed experts—should be allowed.
“In the Ninth Circuit, an unbounded set of ‘nontaxable’ costs is available, exemplified here by a $12 million award of expert witness fees, consulting fees, and other costs not permitted by statute,” the petition stated.
The Ninth Circuit has awarded nontaxable costs in copyright cases since 2005. Judge Richard Tallman reasoned in Twentieth Century Fox v. Enter Distributing that the Copyright Act permits “the recovery of full costs” in copyright cases, as well as attorneys fees. If costs are limited to those permitted in the general costs statute, then the word “full” has no meaning, Tallman wrote. The Ninth Circuit panel that decided Rimini Street said it was “bound by our precedent.”
The Eighth and Eleventh circuits have limited copyright awards to taxable costs. “Section 505 makes no clear reference to witness fees, nor otherwise evinces a clear congressional intent to supersede the limitations imposed by Section 1821,” the Eleventh Circuit held in a per curiam opinion.
A jury found in 2015 that Rimini Street and Ravin infringed Oracle’s copyright and violated anti-hacking statutes while performing third party maintenance services for Oracle enterprise software. Jurors awarded $35.6 million for infringement and $14 million for violations of California computer hacking statutes. U.S. District Judge Larry Hicks of Nevada tacked on $28 million in attorney fees, $20 million in costs—including the $12 million in non-taxable costs—and $22 million in post-judgment interest. The Ninth Circuit reversed the computer crimes verdict and threw out that portion of the award. It also instructed Hicks to reconsider the fee award.
Oracle is represented by Boies Schiller & Flexner and Kirkland & Ellis. Kirkland partner Paul Clement is counsel of record.
“This case is the poster child for why Congress gave courts ‘discretion’ to award prevailing parties in copyright cases their ‘full costs,’” they argued to the court. “Petitioners are conspicuously silent as to why the district court exercised its discretion to award both taxable and nontaxable costs (and attorneys’ fees) in this case—and understandably so, as both the fact of the award and its size were a direct result of their egregious litigation misconduct.”