A unanimous ruling by the Supreme Court held that the word "full" was insufficient to justify awarding additional, nontaxable costs to the prevailing party.
Under the American Rule, the prevailing party ordinarily must
bear the bulk of its litigation expenses, unless Congress has
explicitly authorized a broader award. In Rimini Street, Inc.
v. Oracle USA, Inc., Case No. 17-1625, the U.S. Supreme Court
considered whether the phrase "full costs" in Section 505
of the Copyright Act constitutes such an express authorization,
thereby justifying an award of nearly $13 million in otherwise
nontaxable costs to Oracle.
While Rimini argued that "full costs" did not expand the
standard set of taxable costs specified in the general costs
statutes (28 U.S.C. §§ 1821 & 1920), Oracle argued
that, in addition to those costs, the Copyright Act's reference
to "full costs" authorized all costs the prevailing party
incurred in the litigation, including expert witness fees, jury
consultant fees, and e-discovery costs.
Agreeing with Rimini, the U.S. Supreme Court unanimously held, on
March 4, 2019, that the word "full" was insufficient to
justify the additional costs awarded to Oracle. In reversing the
Ninth Circuit, the Court held that the American Rule cannot be
displaced absent explicit statutory instruction to that effect, and
that the rules of statutory construction and interpretation
prevented the Copyright Act provision awarding "full
costs" from being read in such a way as to alter the set of
costs customarily awarded.
Looking forward, the Court's decision in Rimini does
not bode well for the United States Patent and Trademark Office in
Iancu v. NantKwest, a fee-shifting patent case concerning
the application of the American Rule on the award of "all the
expenses of the proceedings." The Court granted certiorari in
Iancu v. NantKwest on March 4, 2019.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.