The U.S. Circuit Court of Appeals for the Federal Circuit has clarified the scope of 28 U.S.C. § 1920 concerning costs available to the prevailing party under Federal Rule of Civil Procedure 54(d)(1). Summit Technology, Inc. v. Nidek Co., Case No. 05-1292 (Fed. Cir. Jan. 26, 2006) (Bryson, J.).
After prevailing in a patent infringement suit, Nidek was initially awarded costs in the amount of $257,660.13. Following an appeal by both parties and a subsequent remand by the Federal Circuit, the district court increased the award to $388,230.83. Summit appealed portions of the revised award related to the preparation of trial exhibits, photocopy expenses and deposition transcript expenses.
Nidek submitted costs for the preparation of trial exhibits, which included computer animations, graphics and slides. Applying the law of the regional circuit (here the U.S. Court of Appeals for the First Circuit), the Court rejected Nidek’s contention that these costs are allowable if the exhibits are shown to provide "real assistance to the court." Instead, the Court held that the First Circuit would define the term "exemplification" as used in § 1920 to mean "an official transcript of a public record, authenticated as a true copy for use as evidence." This definition, together with the Court’s conclusion that the exhibits in question were essentially explanatory, led the Federal Circuit to hold that the fees for preparation of the trial exhibits were not taxable as costs.
In reviewing the photocopy expenses, the Court looked for proof that "the costs were reasonably necessary to the maintenance of the action." The Court stopped short of requiring a page-by-page accounting and accepted an accounting method that reduced expenses by 50 percent to account for unnecessary copies. However, the Court either reduced or vacated those portions of the award that relied on different accounting methods and were not supported by reasonable proof that they reflected copies necessary to the litigation.
Under First Circuit law, the Court stated that deposition expenses are taxable to the losing party if the "depositions are either introduced in evidence or used at trial." However, the Court indicated that certain convenience services, such as expedited transcripts and video services, are not taxable costs.
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