IP Law News

Justices Wrestle With Scope of Fees in Oracle Copyright Case (1)

Jan. 14, 2019, 5:48 PMUpdated: Jan. 14, 2019, 7:40 PM

U.S. Supreme Court justices struggled to pin down the definition of “full costs” in a copyright case over whether Rimini Street Inc. should have to pay $12.8 million dollars in non-taxable legal expenses to Oracle Corp.

Justice Stephen G. Breyer joined Justice Sonia Sotomayor and several other justices in questioning whether the Copyright Act allows courts to make the loser of a copyright case pay all of the winner’s litigation expenses, including expert witness fees and travel expenses.

“I often think that when Congress uses these words, it doesn’t really think about it,” Breyer said during oral argument.

The high court is reviewing whether the U.S. Court of Appeals for the Ninth Circuit was correct in affirming a legal fee award that Oracle won in a case accusing Rimini of making unauthorized copies of its PeopleSoft, JD Edwards, and Siebel software.

A jury awarded Oracle $35.6 million in infringement damages and granted its request that Rimini pay its legal bills.

The Copyright Act allows courts to order the losing party to pay the “full costs” of the prevailing party’s expenses, including “a reasonable attorney’s fee.”

Sotomayor asked for a definition of “full costs” in three other federal statutes that would “give effect to the word ‘full.’”

All three of those statutes deal with intellectual property and specifically mention attorneys’ fees, Allon Kedem, assistant to the Solicitor General at the Justice Department, said in support of Rimini. If full costs meant all costs, “there would be no point in expressly adding attorneys’ fees,” he said.

Oracle counsel Paul D. Clement, a partner at Kirkland & Ellis LLP, argued that courts should interpret “costs” according to its ordinary meaning and not the definition under 28 U.S. Code §1920, which allows judges to only award taxable costs.

Justice Elena Kagan pressed Clement to distinguish between the two meanings. If the statute only said “costs,” it would refer to the Section 1920 costs, she said. “By adding ‘full,’ you suggest that it’s not the 1920 costs we’re talking about at all,” she said.

Sotomayor said that under Clement’s definition, costs could cover expenses for a witness’s babysitter or for a body language reader. “But that’s not generally how we deal with costs,” she said.

Rimini counsel Mark A. Perry argued that the total costs Oracle incurred in the litigation outweigh the infringement damages that it won. The legal fee award would be more fair without the $12.8 million in non-taxable costs, Perry, a partner at Gibson, Dunn & Crutcher LLP, said.

Breyer dismissed that argument, but suggested that it’s an issue worth exploring in the future.

“I don’t know if that’s relevant, but it does seem a problem, if not in this case,” he said.

The case is Rimini Street, Inc. v. Oracle USA, Inc., U.S., No. 17-1625, argued 1/14/19.

(Updated with additional reporting throughout)

To contact the reporter on this story: Alexis Kramer in Washington at akramer@bloomberglaw.com

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com

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