On November 10, 2010, Magistrate Judge Kaplan set forth his findings and recommendations in Fast Memory Erase v. Intel, a patent infringement lawsuit pending in the Northern District of Texas (pdf copy of the decision located here). This is an important opinion that discusses costs that may be appropriately taxed in a prevailing party’s favor.
Before Judge Kaplan ruled on the costs issues, he first denied Intel’s request that it be awarded its attorney’s fees. Intel had requested $1.6 million in attorney’s fees defending itself against Fast Memory’s patent infringement action. The $1.6 million represented over 4,200 hours of work performed by 22 different lawyers and two paralegals. “Recognizing that attorney’s fees are recoverable only in ‘exceptional cases,’ the Intel Defendants accuse plaintiff of bringing a baseless action in bad faith without any evidence of infringement.” Judge Kaplan disagreed, finding that, among other things, the ultimate issue of infringement had not been litigated or decided by the court, given the parties’ stipulation of non-infringement due to the Court’s construction of a claim term. Fast Memory did not concede that it could not prove infringement on the grounds asserted in Intel’s motion.
Judge Kaplan then took up Intel’s request for $1.1 million in costs. Fast Memory objected to (i) the $1,058,170.90 “paid to an outside vendor for collecting, processing, and producing electronic documents”; (ii) the $38,028.11 for a Markman tutorial; and (iii) the $2,996.21 for certified copies of deposition transcripts. Judge Kaplan found that:
- The $860,533.18 for collecting and processing more than 2,100 gigabytes of electronically stored information was not recoverable because the majority of courts have found that costs for data extraction and storage are not recoverable;
- The $197,637.72 for creating TIFF/OCR images of documents responsive to Fast Memory’s discovery requests was recoverable because Intel produced documents in searchable TIFF format in accordance with Fast Memory’s request;
- The $38,028.11 for Intel’s (computer animated) Markman tutorial was recoverable, because the district court invited the parties to submit Markman tutorials, which is “tantamount to pretrial approval” (i.e., because “expenses for the production of various types of non-testimonial evidence – such as photographs, maps, charts, graphs, and other demonstrative aids – are taxable as costs provided the prevailing party obtained court approval before incurring the expense”); and
- The $2,996.21 for certified copies of deposition transcripts was not recoverable, because Intel failed to failed to demonstrate why it needed certified copies in addition to originals of the deposition transcripts.
Fast Memory Erase is represented by Michael Shore, Alfonso Chan, Jeffrey Bragalone, and Patrick Conroy, all of Shore Chan Bragalone DePumpo LLP; and Jeffrey Waxman, of Morris James LLP.
Intel is represented by Craig Weinlein, of Carrington Coleman Sloman & Blumenthal, L.L.P.; and Chris Ottenweller, Craig Kaufman, Donald Daybell, James Lin, Stacy Margolies, and Steven Baik, all of Orrick Herrington & Sutcliffe LLP.