CBT Flint Partners, LLC v. Return Path, Inc. & Cisco Ironport Systems, LLC, No. 2013-1036 (Fed. Cir. Dec. 13, 2013).

In August 2007, the patentee sued for patent infringement. The district court granted summary judgment against the patentee. The accused infringers sought to recover costs under 28 U.S.C. § 1920, including approximately $243,000 in electronic discovery costs. The district court granted the motion, and the patentee was taxed for the full amounts requested. The patentee appealed.

The Federal Circuit reversed in part and remanded. Starting with the proposition that the applicable statute, 28 U.S.C. § 1920(4), provides recovery only for the costs of actually duplicating documents, the court analyzed the steps of a typical electronic discovery production in order to determine what costs associated with the process could be recovered. It divided the process into three general stages, and discussed the activities that occur at each. At stage one, each document and its related data (including metadata and any blank space) are copied in whole. At stage two, the documents are organized in a review system and reviewed. And at stage three, responsive documents are either copied onto memory media and produced or made available on a secured computer.

The court made clear that “the costs are limited to the duplication needed for the production in the form required.” It opined that costs may be recovered for stage one activities, but only to the extent necessary to produce documents as required by the requester, and only for the costs associated with documents actually produced. Stage two costs can likewise be recovered, but only if necessary to the production process. Installing review software or conducting keyword searches are not necessary, even when demanded by the requesting party. The court noted that parties have other methods to prevent unduly burdensome discovery requests other than payment of fees under the limited provisions of Section 1920. Finally, stage three costs are inexorably linked to the actual production, and thus are recoverable.

Judge O’Malley, concurring in part and dissenting in part, argued that the data duplication process (the majority’s “stage one”) is activity leading up to copying, and not actually part of the copying process. Accordingly, Judge O’Malley would not consider these costs recoverable under Section 1920.

A copy of the opinion can be found here