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Federal Circuit Affirms Taxation of Costs For Certain eDiscovery

Posted on June 10th, 2016

In Deere & Co. v. Duroc, LLC et. al., Case No. 14-1697 (Fed. Cir., May 26, 2016) Plaintiff sued Defendants for patent infringement. Ultimately, the court entered summary judgment in favor of both Defendants and ordered costs to be assessed against Plaintiff. After Defendants submitted their bill of costs, the court assessed the taxation of costs and the court affirmed after review, including a telephonic hearing.

Plaintiff appealed the summary judgment, which was vacated with the case remanded for trial. The jury found that Plaintiff was not infringed, and judgment was again entered in favor of defendants. Defendants again submitted their costs, and Plaintiff objected to them as excessive, beyond the court’s authority, or without sufficient documentation. The court denied all but one of Plaintiff’s objections and found the remaining costs supported by 28 USC § 1920.

Included in the disputed costs were Defendants’ costs for eDiscovery. During the case, the parties entered into an ESI production agreement providing that each document would be produced in TIFF format and include specific metadata. Plaintiff argued that the eDiscovery costs incurred by Defendants are not taxable. In the alternative, Plaintiff argued that the costs were erroneously calculated, as they included hosting expenses for ESI storage, which Plaintiff asserted is not taxable under Section 1920.

The court noted that the hosting fees were resolved and focused solely upon whether eDiscovery costs are taxable as a matter of law. The district court had held that the costs incurred in complying with the ESI agreement were recoverable; the court found that the district court’s finding was not outside its discretion. The costs incurred in copying and producing the required formats are a taxable cost of creating a duplicate, while costs incurred in preparing documents for copying and production in the agreed format are ancillary. The district court relied upon the agreement, and the court found this reliance proper. The court upheld the taxation of costs.

ILS – Plaintiff ESI Discovery Experts

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