Chapter §20.09 Costs

• Jurisdiction: United States

§20.09 Costs

The availability of "costs" under 35 U.S.C. §284¹¹⁸¹ refers to Fed. R. Civ. P. 54(d)(1), which creates a presumption that a prevailing party shall be awarded costs.¹¹⁸² The types of expenses that a federal court may award as costs under its Rule 54(d)(1) discretionary authority are listed in 28 U.S.C. §1920, and include fees for the court reporter, witnesses, court appointed experts, copying costs, and the like.¹¹⁸³

The Federal Circuit has adopted a choice-of-law rule in which the court applies its own law, rather than that of the regional circuit for the geographic territory from which a case arose, to define the meaning of prevailing party in the context of an award of costs in patent litigation.¹¹⁸⁴ In Manildra Milling Corp. v. Ogilvie Mills, Inc.,¹¹⁸⁵ the issue was whether a declaratory judgment plaintiff that "receive[d] no money damages at all but instead 'receive[d] a hard fought declaration that its competitor's patents are invalid,' and survive[d] the competitor's counterclaim for $17 million in patent infringement damages,"¹¹⁸⁶ was a prevailing party for purposes of awarding costs. Although the declaratory judgment plaintiff, Manildra Milling, failed to prevail on its claims under the Sherman (Antitrust) Act, the Lanham (Trademark) Act, and state common law claims, its victory on the patent issues was "complete." In the Federal Circuit's view, such a victory qualified Manildra Milling as a "prevailing party,"¹¹⁸⁷ entitling it to an award of costs of approximately $83,000.¹¹⁸⁸

In Ortho-McNeil Pharm., Inc. v. Mylan Labs., Inc., a judge in the Northern District of West Virginia awarded approximately $1.3 million in costs to patentee Daiichi Pharmaceutical Co. ("Daiichi") under 28 U.S.C. §1920 and Federal Rule of Civil Procedure 54(d).¹¹⁸⁹ The Hatch-Waxman Act litigation at issue in Ortho-McNeil concerned Daiichi's U.S. Patent No. 5,053,407 ('407 patent), which was directed to an antibiotic compound known as levofloxacin, a pioneer drug approved by the U.S. Food and Drug Administration under the trade name "Levaquin." Daiichi prevailed in the West Virginia litigation after Mylan failed to prove the '407 patent invalid or unenforceable. Notably, Daiichi had also sued generic manufacturer Teva Pharmaceuticals in a separate levofloxacin-related civil action in a different district court (i.e., the District of New Jersey).

With regard to the large majority of the costs submitted by prevailing party Daiichi and awarded by the district court...