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The Price of Patent (and Other) Litigation

November 8, 2012

Under the “American rule” of litigation, both parties—the loser and the winner—typically bear their own fees, regardless of whether the defendant rightly won a meritless lawsuit, or the plaintiff rightly sought judgment against a law–defying entity or individual. Of course, every rule has an exception, and we’ve previously talked about the “exceptional case” theory in patent litigation.

Today, with thanks to Docket Navigator, we briefly discuss a related topic—when a prevailing party may recoup its costs. The guiding statute in this area is 28 U.S.C. § 1920, which lays out very specific categories of costs that may be taxed to the losing party. As demonstrated by Abbott Point of Care Inc. v. Epocal, Inc., however, Section 1920’s perhaps outdated specificity means that several costs, now routinely incurred in complex litigation, may never be recouped. Abbott focused on the costs of an electronic discovery database, which the court, while sympathetic, found outside the scope of awardable costs. As any patent litigant will know, electronic discovery database management can constitute a lion’s share of the costs incurred in litigation, and—in cases where hundreds of thousands if not millions of documents are not–infrequently handed over—are nearly unavoidable. It may be time to consider a statutory spring cleaning.

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