Supreme Court Limits Awards of Attorneys' Fees in Copyright Cases

Rimini Street case could have implications for future plaintiffs seeking damages for infringement under the U.S. Copyright Act.

** LEGAL UPDATE **

Anyone suing over copyright infringement is likely to care about the potential money damages that could be awarded at trial. Such plaintiffs will want to consider a recent decision from the U.S. Supreme CourtRimini Street Inc. v. Oracle USA Inc. (2019)that clarifies (and limits) the categories of damages that a successful plaintiff can receive.

Background of Rimini Case

Rimini Street Inc., provided third-party support for various software produced by Oracle USA, Inc. Rimini's support services competed with the support services that Oracle itself provided customers. To compete with Oracle, Rimini regularly downloaded Oracle's software updates from its website, violating Oracle's terms of use. Oracle held a copyright over its software updates.

Oracle sued Rimini for copyright infringement in the U.S. District Court for the District of Nevada. Following a trial, the jury found for Oracle, awarding it approximately $124 million of damages.

Included in that total award were sums for attorney's fees, prejudgment interest, and various "non-taxable costs." Non-taxable costs in this context include items like fees for expert witnesses, jury consulting services, and fees for electronic discovery. All of these items were initially paid by Oracle to support its prosecution of its case.

Rimini appealed to the U.S. Court of Appeals for the Ninth Circuit. In a decision dated January 8, 2018, the Ninth Circuit unanimously affirmed the award but reduced the total amount of the damages.

The court fully affirmed the award of the non-taxable costs, however, citing 17 U.S.C. § 505, a provision of the Copyright Act of 1976 that authorizes a court to award the recovery of “full costs” to the winning party. Section 505 states:

In any civil action under this title, the 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.

The problem, however, is that the statute does not clearly define the phrase "full costs." Rimini, seeking to avoid paying those non-taxable costs to Oracle, petitioned the U.S. Supreme Court, which agreed to hear the case.

The Supreme Court's Decision in Rimini

On appeal to the U.S. Supreme Court, the key question for the justices was whether or not the Copyright Act's allowance of “full costs” to a prevailing party should be limited to taxable costs, or whether it should also include non-taxable costs.

In a unanimous decision by Justice Brett Kavanaugh dated March 4, 2019, the U.S. Supreme Court reversed the Ninth Circuit, holding that only taxable costs are recoverable.

"The term 'full costs' in Section 505 of the Copyright Act means the costs specified in the general costs statute codified at Sections 1821 and 1920," the Court wrote. It found that the Ninth Circuit was incorrect in awarding those non-taxable costs to the prevailing party. The two statutory sections referenced by the Court, 28 U.S.C. § 1920 and 28 U.S.C. § 1821, limit the categories of damages that a trial court can award to a plaintiff.

As Justice Kavanaugh explained: "The term 'full' is a term of quantity or amount; it does not expand the categories or kinds of expenses that may be awarded as 'costs' under the general costs statute. In copyright cases, Section 505’s authorization for the award of “full costs” therefore covers only the six categories specified in the general costs statute, codified at §§ 1821 and 1920."

What Rimini Case Means for Future Patent Litigants

Although Rimini Street might appear to be a narrow legal issue, the case could have implications for future plaintiffs seeking damages for infringement under the Copyright Act. The Supreme Court has limited the scope of the phrase "full costs" in the Copyright Act to exclude non-taxable costs, which are typically litigation-related expenses.