For the second time in two years, the Supreme Court will be taking a look at 17 USC §505, which addresses attorney’s fees and court costs in copyright infringement lawsuits. Section 505 provides that a “court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.” Court costs can obviously be very significant, and the ability to recover them has an impact on whether plaintiffs pursue meritorious claims or defendants defend against unmeritorious claims.
In its 2016 Kirtsaeng II decision, the Court laid out a standard for when a court should award attorney’s fees to prevailing parties, one that, in its words, “advances the Copyright Act’s goals” by “encouraging and rewarding authors’ creations while also enabling others to build on that work.” Now, in Rimini Street v Oracle, the Court is set to determine what costs are included as part of the “full costs” that a court may allow recovery of. Several circuits have held that the types of costs a party may recover are limited to those taxable costs that are enumerated in a separate part of the US Code, 28 USC §§ 1920 and 1821. However, other courts, including the Ninth Circuit below, held that “full costs” means any award of costs under §505 is not limited to those categories of costs laid out in §1920.
Oracle filed a lawsuit against Rimini in 2010 and prevailed on its copyright claims in the district court. The district court awarded Oracle nearly $5 million in taxable costs and over $12 million in nontaxable costs under §505. The Ninth Circuit affirmed these awards (though it reduced the taxable costs award by about $1.5 million because of a clerical error by the district court).
Rimini appealed to the Supreme Court, arguing that §505 only permits recovery of those categories of costs considered taxable under §1920, which provides a list of six categories that a court may tax. It asserts that “costs” has a well-established meaning at law—it only includes those costs that Congress specifies a court can tax absent clear statutory direction otherwise. If Congress intended to permit courts to award nontaxable costs, it would have used the terms “expenses” or “fees.”
The US government supports Rimini’s position. In an amicus brief filed by the US Solicitor General and US Copyright Office, the federal government agrees that when statutes use the term “costs”, it refers to a limited subset of costs and doesn’t mean all litigation expenses incurred. It also argues that the use of the word “full” to modify costs signifies the amount that courts may award, not the types of costs a party can recover. It goes on to argue that the history of US copyright law supports this interpretation of “full costs”.
In response, Oracle argues that the plain meaning of “full costs” in §505 is clear, and that Rimini’s equation of “costs” with “taxable costs” is not supported by the statute’s language and would render the word “full” superfluous. Oracle also argues that Rimini’s distinction between “costs”, “fees”, and “expenses” is not well supported by the US Code. Finally, Oracle counters the US government’s historical arguments, asserting that historical practice and prior copyright statutes do not establish the meaning of “full costs” that the government claims they do.
The Copyright Alliance filed an amicus brief in support of Oracle, agreeing that the plain text of the statute and history of copyright law don’t limit the types of litigation costs that a court may award prevailing parties under §505. Such a result advances the goals of the Copyright Act. Litigation expenses are often significant. Without the ability to recover them, copyright owners would be discouraged from protecting and enforcing their rights in court, which in turn would reduce the incentives that those rights provide. Defendants would also be discouraged from defending against unmeritorious claims if they had to bear the costs of doing so themselves—and the Supreme Court has repeatedly recognized the value that litigating claims brings to clarifying the boundaries of copyright law.
The burden of litigation falls heaviest on individual creators and defendants—which is why we continue to support the creation of a copyright small claims process to provide a voluntary alternative to federal litigation that would provide a streamlined, cost-effective mechanism for settling copyright disputes. Without the ability to recover all litigation expenses, federal courts would be even further out of reach for such individuals.
Our brief highlights the fact that copyright litigation frequently involves the types of costs that would not otherwise be considered taxable under §1920. For example, expert witnesses are often used in copyright lawsuits to help courts understand the “extent to which a work contains protectable expression, the nature and scope of a violation of rights via digital means, the market harm caused by a new use, or other elements necessary to prove the claim.” Without the ability to recover these costs, plaintiffs and defendants would be discouraged from fully and fairly litigating their copyright claims and defenses.
At today’s oral arguments, the Supreme Court Justices will hear from Oracle, Rimini Street, and the US Solicitor General to help them reach their final decision, which will likely be issued later this spring. We hope it agrees that “full costs” means full costs and appreciates the role that recovery of such costs plays in advancing the goals of the copyright law.
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