Oracle America, Inc. v. Google Inc.

Filing 1228

Reply to Objections re #1216 Bill of Costs filed byGoogle Inc.. (Attachments: #1 Exhibit A, #2 Exhibit B)(Related document(s) #1216 ) (Van Nest, Robert) (Filed on 8/3/2012) Modified on 8/6/2012 (dtm, COURT STAFF).

1
2
3
4
5

KEKER & VAN NEST LLP
ROBERT A. VAN NEST - # 84065
[e-mail]
CHRISTA M. ANDERSON - # 184325
[e-mail]
DANIEL PURCELL - # 191424
[e-mail]
633 Battery Street
San Francisco, CA 94111-1809
Telephone:
415 391 5400

6
7
8
9
10
11

KING & SPALDING LLP
SCOTT T. WEINGAERTNER
(Pro Hac Vice)
[e-mail]
ROBERT F. PERRY
[e-mail]
BRUCE W. BABER (Pro Hac Vice)
1185 Avenue of the Americas
New York, NY 10036
Tel: [phone]

KING & SPALDING LLP
DONALD F. ZIMMER, JR. - #112279
[e-mail]
CHERYL A. SABNIS - #224323
[e-mail]
101 Second Street, Suite 2300
San Francisco, CA 94105
Tel: [phone]
IAN C. BALLON - #141819
[e-mail]
HEATHER MEEKER - #172148
[e-mail]
GREENBERG TRAURIG, LLP
1900 University Avenue
East Palo Alto, CA 94303
Tel: [phone]

12
13

Attorneys for Defendant
GOOGLE INC.

14

UNITED STATES DISTRICT COURT

15

NORTHERN DISTRICT OF CALIFORNIA

16

SAN FRANCISCO DIVISION

17

ORACLE AMERICA, INC.,

18

Plaintiff,

19

v.

20

GOOGLE INC.,

21

Case No. 3:10-cv-03561 WHA
GOOGLE’S REPLY TO ORACLE’S
OBJECTIONS TO GOOGLE’S BILL OF
COSTS
Dept.:
Judge:

Courtroom 8, 19th Floor
Hon. William Alsup

Defendant.

22
23
24
25
26
27
28
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA
684249.02

1
2

Table of Contents

3

I.

INTRODUCTION ...............................................................................................................1

4

II.

ARGUMENT .......................................................................................................................2

5

A.

Google is entitled to recover its taxable costs. .........................................................2

6

1.

Google is presumptively entitled to recover its taxable costs. .....................2

7

2.

Oracle fails to overcome the presumption in favor of costs. .......................3

8

B.

9

Google is entitled to recover the e-discovery costs itemized in its Bill of
Costs.........................................................................................................................6
1.

Google seeks recovery of only the portion of its e-discovery costs
attributable to reproducing disclosure or formal discovery
documents. ...................................................................................................6

2.

10

The “Inbound processing” rate charged by Google’s e-discovery
vendor is reasonable and competitive in the industry. .................................8

11
12
13
14

C.
III.

Google is entitled to recover as costs the fees it paid to Dr. Kearl. .........................9

CONCLUSION ..................................................................................................................10

15
16
17
18
19
20
21
22
23
24
25
26
27
28
i
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA
684249.02

1

TABLE OF AUTHORITIES

2

Federal Cases

3

A.H.D.C. v. City of Fresno
No. CIV-F-97-5498, 2004 WL 5866234 (E.D. Cal. Oct. 1, 2004) ............................................ 9

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

Endurance Am. Speciality Ins. Co. v. Lance-Kashian & Co.
No. CV F 10-1284 LJO DLB, 2011 WL 6012213 (E.D. Cal. Dec. 1, 2011) ............................ 4
Friel v. Daley
230 F.3d 1366 (9th Cir. 2000) ................................................................................................... 4
Jardin v. DATAllegro, Inc.
No. 08-CV-1465-IEG, 2011 WL 4835742 (S.D. Cal. October 12, 2011) ............................. 6, 7
Martin v. Cal. Dept. of Veterans Affairs
560 F.3d 1042 (9th Cir. 2009) ................................................................................................... 4
Parrish v. Manatt, Phelps & Phillips, LLP
No. C 10-03200 WHA, 2011 WL 1362112 (N.D. Cal. April 11, 2011) ............................... 2, 6
Quan v. Computer Scis. Corp.
623 F.3d 870 (9th Cir. 2010) ................................................................................................. 2, 3
Shum v. Intel Corp.
629 F.3d 1360 (Fed. Cir. 2010).................................................................................................. 3
Valley v. Sound Transit
335 F.3d 932 (9th Cir. 2003) ..................................................................................... 4, 5, 6, 7, 9
Federal Statutes
U.S.C. §1920(6) ............................................................................................................................... 9
State Statutes
Cal. Civil .L...................................................................................................................................... 6
Federal Rules
Fed. R. Civ. P. 54(d)(1).................................................................................................................... 2
Fed. R. Evid. 706 ....................................................................................................................... 9, 10

24
25
26
27
28
ii
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA
684249.02

1
2

I.

INTRODUCTION
Google seeks to recover a portion of the several million dollars in costs it spent defending

3

against Oracle’s copyright and patent infringement claims. Google, as the prevailing party, is

4

presumptively entitled to recover its taxable costs. Google’s Bill of Costs (Dkt. 1216) is

5

reasonable, and is adequately supported by declarations and invoices documenting each of the

6

costs claimed. The Court should therefore tax costs in the full amount claimed.

7

Oracle’s objections to Google’s Bill of Costs miss the mark. First, Oracle urges the Court

8

to disallow all costs. According to Oracle, costs are unwarranted because the judgment was

9

“mixed.” The judgment was not “mixed” in any meaningful sense of the word. After almost two

10

years of litigation and a five-week jury trial, Oracle recovered nothing—not one penny.

11

Oracle also argues the case was “complex.” The case was complex because Oracle

12

overreached. Oracle alleged infringement of seven patents and 132 claims, and refused to narrow

13

its patent claims until long after several of the patents were invalidated in re-examination

14

proceedings. It also alleged that Google copied Java source code, documentation, and comments,

15

and it eventually transformed its copyright-infringement theory into an overbroad claim based on

16

the “structure, sequence, and organization” of API packages. This case would have been far less

17

complex if Oracle had narrowed its claims before and during the litigation.

18

Oracle also notes that the case was “importan[t] to the computer software industry.” The

19

case was important to the industry because Oracle attempted (unsuccessfully) to lock down the

20

free and open Java language. Not surprisingly, millions of Java developers in the industry were

21

alarmed at and took interest in Oracle’s unprecedented claims. Regardless, complex and

22

newsworthy cases cost money too; these are not reasons to deny costs to Google.

23

Finally, Oracle argues that the case was “close” and that it litigated “in good faith.” The

24

same could be said for many cases that go to trial. The presumption in favor of costs would be

25

meaningless if costs were disallowed in all such cases.

26

Second, Oracle misrepresents that Google sought to recover “the entirety of its e-

27

discovery expenses.” Oracle knows better. The invoices that Google submitted with its Bill of

28

Costs include many charges for which Google did not seek recovery, and Google’s counsel
1
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA

684249.02

1

specifically discussed this fact with Oracle’s counsel in a meet and confer call. Google sought to

2

recover only the portion of its e-discovery costs attributable to reproducing disclosure or formal

3

discovery documents. That portion amounts to less than half of its e-discovery costs in this case.

4

Third, Oracle argues that the parties agreed in advance not to seek recovery of Dr. Kearl’s

5

fees, which, as even Oracle concedes, would otherwise be recoverable as costs. See Dkt. 1225 at

6

9:16-10:17. Not so. The parties agreed to split Dr. Kearl’s fees for the purposes of paying Dr.

7

Kearl while the litigation was ongoing. They did not agree, and the Court did not order, that the

8

prevailing party would be barred from seeking to recover those fees after the litigation concluded.

9

For all of these reasons, and the reasons stated in Google’s Bill of Costs and supporting

10

declarations, the Court should tax costs in the full amount claimed in Google’s Bill of Costs.

11

II.

ARGUMENT

12

A.

13

“Unless a federal statute, these rules, or a court order provides otherwise, costs—other

Google is entitled to recover its taxable costs.

14

than attorney’s fees—should be allowed to the prevailing party.” Fed. R. Civ. P. 54(d)(1)

15

(emphasis added). The Ninth Circuit has held that Rule 54 “create[s] a presumption for awarding

16

costs to prevailing parties,” and likewise “places on the losing party the burden to ‘show why

17

costs should not be awarded.’” Quan v. Computer Scis. Corp., 623 F.3d 870, 888 (9th Cir. 2010)

18

(quoting Save our Valley v. Sound Transit, 335 F.3d 932, 944-45 (9th Cir. 2003)); accord Parrish

19

v. Manatt, Phelps & Phillips, LLP, No. C 10-03200 WHA, 2011 WL 1362112, at *1 (N.D. Cal.

20

April 11, 2011). Oracle failed to satisfy its burden of showing why costs should be disallowed.

21
22

1.

Google is presumptively entitled to recover its taxable costs.

Google is the prevailing party in this case. See Robert E. Jones et al., Federal Civil Trials

23

and Evidence, 19:5 (Rutter Group, 2012) (“The ‘prevailing party’ is the party who prevails as to

24

the substantial part of the litigation.” (citing Testa v. Village of Mundelein, Ill., 89 F.3d 443, 447

25

(7th Cir. 1996)). Oracle does not argue otherwise, nor could it so argue. Google successfully

26

defended against Oracle’s billion-dollar damages claims and its sweeping request for injunctive

27

relief. There can be no dispute that Google prevailed on a “substantial part of the litigation.”

28
2
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA
684249.02

1

Even if this were a true “mixed judgment” case (it is not), Google still would be the

2

prevailing party. “A court must choose one, and only one, ‘prevailing party.’” Shum v. Intel

3

Corp., 629 F.3d 1360, 1367 (Fed. Cir. 2010). Oracle cannot be deemed the prevailing party

4

because it did not obtain any relief that “materially alter[ed] the legal relationship between the

5

parties.” See id. Therefore, Google is the prevailing party. The Federal Circuit has explained:

6

Thus, even in mixed judgment cases, punting is not an option; Rule 54
does not allow every party that won on some claims to be deemed a “prevailing
party.” For the purposes of costs and fees, there can be only one winner. A court
must choose one, and only one, “prevailing party” to receive any costs award.

7
8
9
10
11

The rub, of course, is choosing the “prevailing party” in a mixed judgment
case like this one. To be a “prevailing party,” our precedent requires that the party
have received at least some relief on the merits. That relief must materially alter
the legal relationship between the parties by modifying one party's behavior in a
way that “directly benefits” the opposing party.
Id. (internal footnote omitted). As the prevailing party, Google is presumptively entitled to costs.

12
See id. at 1370; Quan, 623 F.3d at 888.
13
14

2.

Oracle fails to overcome the presumption in favor of costs.

Oracle urges the Court to disregard the presumption in favor of costs and deny Google’s
15
request in its entirety because, according to Oracle, the judgment was “mixed,” the case was
16
complex, attracted industry attention, and was “close,” and because Oracle litigated “in good
17
faith.” None of these objections is sufficient to overcome the presumption favoring a costs award.
18
The judgment in this case was not “mixed” in any meaningful sense of the word. Oracle
19
recovered nothing. See Dkt. 1211 [Final Judgment]. It is true that judgment was entered for
20
Oracle on two minor aspects of its copyright claim—literal copying of rangeCheck and “the eight
21
decompiled files.” See id. But this literal copying constituted at most a few hundred lines of code
22
out of the 15 million in the Android platform. It is also true that Google, in an effort to streamline
23
the trial, declined to present its patent-invalidity counterclaims to the jury. Yet the jury
24
unanimously found that Google did not infringe either patent. And it is also true that the Court
25
rejected two of Google’s equitable defenses. See id. But none of this resulted in any relief for
26
27
28
3
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA
684249.02

1

1

Oracle. This case is thus nothing like the “mixed judgment” case Oracle cites, in which the

2

plaintiff “predominately prevailed on the parties’ declaratory relief claims but did not prevail on

3

its damages claims.” Endurance Am. Speciality Ins. Co. v. Lance-Kashian & Co., No. CV F 10-

4

1284 LJO DLB, 2011 WL 6012213, at *1 (E.D. Cal. Dec. 1, 2011).

5

Moreover, even if this were a true “mixed judgment” case (it is not), Oracle’s argument

6

should still be rejected because there is no reason to deny Google’s cost request in its entirety.

7

The Court may “assess costs to reflect the amount of success each party achieved.” Friel v.

8

Daley, 230 F.3d 1366, at *2 (9th Cir. 2000) (table decision); see also Martin v. Cal. Dept. of

9

Veterans Affairs, 560 F.3d 1042, 1053 (9th Cir. 2009). Given that Google prevailed on every

10

significant aspect of this case, it would be unjust to bar Google from recovering any costs simply

11

because Oracle received a judgment in its favor on peripheral issues that did not affect the

12

ultimate relief (or lack thereof) obtained. At the very least, the Court should exercise its

13

discretion to apportion costs.

14

The “complexity” of this case is no reason to bar Google from recovering costs. Patent

15

and copyright cases involving modern technologies are often complex. If “complexity” alone

16

were sufficient to deny costs, the presumption in favor of awarding costs would be unfairly

17

denied to those litigating many intellectual property cases. See Save Our Valley, 335 F.3d at 945

18

(“Our requirement that a district court give reasons for denying costs is, in essence, a requirement

19

that the court explain why a case is not ordinary.” (quoting Assoc. of Mexican-American

20

Educators v. California, 231 F.3d 572, 5923-93 (9th Cir. 2003)).

21

Moreover, Oracle made this case far more complex than it needed to be. Oracle alleged

22

infringement of seven patents and 132claims, and insisted on keeping all of those claims in play

23

until one month before the date initially set for trial, October 31, 2011, despite the fact that the

24

vast majority of those claims had already been rejected as invalid in re-examination proceedings.

25

See Dkt. 131, 471. Oracle finally agreed to drop some patent claims, but only as a result of its

26

1

27
28

Oracle states, without any evidentiary support, that “Google did remove the copied code from Android as a result
of this lawsuit.” Dkt. 1225 at 6:5-6. The evidence established only that rangeCheck was removed from Android over
a year before the trial. RT 825:8-19 (Bloch). There is no evidence about why it was removed. There is no evidence
that the “eight decompiled files” ever appeared on a handset in the first place. RT 1319:15-20 (Mitchell).

4
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA
684249.02

1

losses in re-examination proceedings and its desire for a spring 2012 trial. See Dkt. 777, 786. As

2

for its copyright claim, Oracle made overly broad and amorphous allegations of copying of source

3

code, documentation, comments, and the “structure, sequence, and organization” of APIs and the

4

specifications that document the APIs. Dkt. 899. Its infringement theory alleged literal copying,

5

non-literal copying, and creation of derivative works. See id. This case would have been far less

6

complex if Oracle had narrowed its claims at the outset and prepared a streamlined case for trial.

7

See RT at 21:21-22:3 (THE COURT) (“But, Mr. Jacobs, you must remember. I'm going to say to

8

the jury many times in this case: The issue is not Java. It's not Android. It’s very specific parts

9

about Java that are protected, if at all, by copyrights or patents and very specific parts of Android

10

that are accused. So if we start getting off onto this is Java versus Android, the judge is going to

11

intervene and say it's not. So you must be very careful on that”). Oracle should not benefit from

12

overcomplicating its own case.

13

The media and industry interest in the case is likewise no reason to deny costs to Google.

14

Oracle tried to lock down the Java language and APIs, which millions of software developers had

15

long understood to be free and open for anyone to use. RT 962:4-14 (Swetland); RT 861:9-23

16

(Lindholm); RT 1769:18-1770:1, 1782:6-17 (Bornstein); see also RT 2202:6-11 (Astrachan).

17

Naturally, the computer software industry took note of Oracle’s unprecedented claims. Oracle

18

itself attempted to attract additional media attention to its case by, for example, issuing multiple

19

press releases about its claims, and by posting its opening and closing graphics, as well as select

20

trial exhibits (mostly internal Google emails and presentations) to its corporate website. See

21

http://www.oracle.com/us/corporate/features/google-suit/index.html, last visited August 3, 2012.

22

In fact, those demonstratives and trial exhibits are still available for public download today. The

23

public interest in this case—a significant amount of which was generated by Oracle itself—does

24

not justify denying costs to Google.

25

Oracle’s assertions that this case was “close” and that it “litigated . . . in good faith

26

throughout,” Dkt.1225 at 3-6, should not limit Google’s right to recover its properly taxable costs.

27

Many cases that go to trial are “close.” If costs were denied in all such cases, the presumption in

28

favor of costs would be meaningless in the very cases where costs are likely to be highest, i.e., the
5
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA

684249.02

1

cases that go to trial. Similarly, if costs were denied in all cases where the losing party claims to

2

have litigated in good faith, “the ‘good faith’ exception would swallow Rule 54’s presumption.”

3

Jardin v. DATAllegro, Inc., No. 08-CV-1465-IEG, 2011 WL 4835742, *3 (S.D. Cal. October 12,

4

2011). “A district court deviates from normal practice when it refuses to tax costs to the losing

5

party.” Save our Valley, 335 F.3d at 945. There is no reason to deviate from normal practice here.

6

Google spent tens of millions of dollars in fees and costs defending against Oracle’s

7

claims in this case. Google chose not to seek attorney’s fees from Oracle, and its costs request of

8

$4,030,669 is far less than what it actually spent in costs in this case. See Ex. A., Supplemental

9

Declaration of Kristin Zmrhal in Support of Google’s Bill of Costs (“Supp. Zmrhal Decl.”) at ¶ 2

10

(noting that Google spent approximately $7.5 million in e-discovery costs alone). Oracle offers

11

no persuasive reason why the Court should depart from ordinary practice and disallow Google,

12

the prevailing party, from recovering its taxable costs.

13
14
15

B.

Google is entitled to recover the e-discovery costs itemized in its Bill of Costs.
1.

Google seeks recovery of only the portion of its e-discovery costs
attributable to reproducing disclosure or formal discovery documents.

“The cost of reproducing disclosure or formal discovery documents when used for any
16
purpose in the case . . . ” is a taxable cost. Civil. L.R. 54-3(d)(2). Google sought recovery of
17
approximately $2.9 million in e-discovery costs. Dkt. 1216 at 1. That amount included only
18
those costs fairly attributable to Google’s reproduction of disclosure or formal discovery
19
documents. Suppl. Zmrhal Decl. at ¶ 3; see also Dkt. 1216, Ex. A, Declaration of Kristin Zmrhal
20
in Support of Google’s Bill of Costs (“Zmrhal Decl.”) at ¶¶ 4, 6. Google submitted invoices
21
documenting those costs (Dkt. 1220, Ex. C), as well as a spreadsheet listing the specific invoice
22
line-items for which Google sought recovery (id., Ex. B). Thus, the costs are recoverable. See
23
N.D. Cal. Civil .L.R. 54-3(d)(2); Parrish, 2011 WL 1362112, at *2 (“The reproduction costs
24
defendants incurred in collecting, reviewing, and preparing client documents for production were
25
necessary expenditures made for the purpose of advancing the investigation and discovery phases
26
of the action. As such, they are properly taxable.”).
27
With one exception (discussed below), Oracle does not object to any of the line-item
28
6
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA
684249.02

1

charges on Google’s itemized list of costs. Rather, Oracle argues that Google should not recover

2

any e-discovery costs because, according to Oracle, Google sought recovery of the “entirety of its

3

e-discovery expenses.” See Dkt. 1225 at 8:20, 1:6-7. Oracle is wrong, as even a cursory review

4

of Google’s Bill of Costs shows. The twelve e-discovery related invoices from FTI Inc. that

5

Google submitted (under seal) with its Bill of Costs plainly include many line-item costs for

6

which Google did not seek recovery. Compare Dkt. 1220, Ex. B (spreadsheet of claimed costs)

7

with Ex. C (invoices from Google’s e-discovery vendor). The costs listed in those twelve

8

invoices total approximately $4.7 million—or over $1.8 million more than the amount Google

9

requested in its Bill of Costs. Google’s counsel specifically discussed this fact with Oracle’s

10

counsel in a July 20, 2012 meet and confer call, and yet Oracle still objected to Google’s bill.

11

Oracle also suggests that “[w]hile some of these expenses may have been necessary for

12

physical reproduction purposes, some of them surely reflect the ‘intellectual effort’ of organizing,

13

searching, and analyzing the documents for Google’s own case preparation purposes.” Dkt. 1225

14

at 8:23-26. Again, Oracle does not identify a single line-item from Google’s Bill of Costs that it

15

finds objectionable. Line-item descriptions like “inbound processing,” TIFF Generation,” “TIFF

16

Endorsement,” and “run production printer, extract full text, create image load file and DAT for

17

GOOGOR-018,” Dkt. 1220, Ex. B-C, do not involve legal or case analysis done for counsel’s

18

convenience. See, e.g., Jardin, 2011 WL 4835742, *6 (“The processes required to properly

19

preserve, restore, retrieve, or convert e-data so that it may be produced in discovery are ‘highly

20

technical’ and substantially different from ‘the types of services that attorneys or paralegals are

21

trained for or are capable of providing.’”); see also Dkt. 67 [Joint ESI Agreement] at 2-5

22

(requiring the parties to run search terms on custodial documents, convert documents to TIFF

23

format for production, and provide metadata and OCR data with the production). Because

24

Google supported its Bill of Costs with declarations and documentation establishing the nature

25

and amount of the costs claimed, it is Oracle’s burden to show why specific costs should not be

26

recoverable. See Save our Valley, 335 F.3d at 944-45. Oracle failed to meet that burden here.

27
28

All in all, Google paid FTI roughly $7.5 million for e-discovery costs in this case. Supp.
Zmrhal Decl. at ¶ 3. The $2.9 million Google sought to recover in its Bill of Costs is fair and
7
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA

684249.02

1

reasonable, and is actually attributable to reproduction of discovery documents, as is apparent

2

from the line-item descriptions on the invoices and Google’s itemized spreadsheet. For all of

3

these reasons, Oracle’s broad-brush objection to Google’s e-discovery costs should be overruled.

4
5

2.

The “Inbound processing” rate charged by Google’s e-discovery
vendor is reasonable and competitive in the industry.

FTI, a leading e-discovery firm, provided e-discovery services to Google in this case. Ex.
6
B, Declaration of William Adams in Support of Google’s Bill of Costs (“Adams Declaration”) at
7
¶ 3. Amongst many other things, FTI filtered, indexed and transformed Google’s electronic data
8
into a common format so that it could be uploaded to and produced from a document-production
9
database. Id. at ¶ 5. This process is referred to as “inbound processing.” Id. Oracle contends
10
that FTI’s inbound processing rate was unreasonable. Dkt. 1225 at 9:1-15. Oracle is wrong.
11
As a result of its formal disclosure obligations and Oracle’s 204 separate discovery
12
requests, Google collected and delivered to FTI over 97 million documents for processing.
13
Zmrhal Decl. at ¶ 6.a. FTI developed custom processing routines to accommodate the unique
14
formats in which Google’s ESI was stored. Adams Decl. at ¶ 7. The rate FTI charged Google
15
for inbound processing was the product of several rounds of negotiations, the last of which ended
16
in September 2010, shortly after Oracle filed its complaint in this case. Id. at ¶ 6. FTI’s rate
17
reflects the custom nature of the inbound processing routines it developed for Google and also the
18
rate it charged Google for other document-production related services in this case. Id. at ¶¶ 6-7.
19
FTI’s inbound processing rate was reasonable. Id. at ¶ 9. The rate was competitive in the
20
market in light of the complexity of the services performed and the rates FTI charged Google for
21
other document-production related services. Id. Oracle’s objection merely recites current price
22
quotes that Oracle purportedly received from other e-discovery vendors. See Dkt. 1225 at 9:1-13.
23
Oracle does not describe the basis for those quotes, nor does Oracle discuss (1) how differences in
24
format and storage of ESI from one customer to another might affect rates, (2) how market rates
25
now might differ from rates in 2010 and early 2011, or (3) how a vendor’s inbound processing
26
rate might be affected by the rates it charges for other corresponding document-production related
27
services. For these reasons, Oracle has failed to meet its burden of showing that Google’s costs
28
8
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA
684249.02

1

for inbound processing should be disallowed or reduced.

2

C.

3

The Court appointed Dr. James Kearl to serve as an independent damages expert in this

Google is entitled to recover as costs the fees it paid to Dr. Kearl.

4

case pursuant to Fed. R. Evid. 706. Dkt. 374. An expert appointed under Rule 706 is to be paid

5

“by the parties in the proportion and at the time that the court directs—and the compensation is

6

then charged like other costs.” Fed. R. Evid. 706(c)(2) (emphasis added). Therefore, as with its

7

other costs, Google is presumptively entitled to recover the fees it paid to Dr. Kearl. See Save

8

Our Valley, 335 F.3d at 944; 28 § U.S.C. 1920(6) (listing “compensation of court appointed

9

experts” as a recoverable cost).

10

Oracle argues that the parties disclaimed any right to recover Dr. Kearl’s fees when they

11

agreed that Dr. Kearl’s “professional fees and expenses will be paid to Mr. Cooper, one half by

12

each party . . . .” Dkt. 1225 at 9-10 (citing Dkt. 407 at 4:14-16). Not so. The joint Proposed

13

Order (Dkt. 407) that Oracle cites describes the “procedures by which the parties will pay for [Dr.

14

Kearl’s] work and expenses” during the pendency of the case. See Dkt. 374 (Order appointing

15

Dr. Kearl and directing the parties to draft a joint proposed order regarding his assignment). This

16

arrangement is consistent with the notion that the prevailing party would then recover its portion

17

of the fees when the case ended. Indeed, this is precisely the procedure contemplated in Rule

18

706. The Rule says that the parties are to pay the court appointed expert “in proportion and at

19

the time that the court directs.” Fed. R. Evid. 706(c)(2) (emphasis added). That is what

20

happened here. The Court directed the parties to draft a proposed order explaining when and in

21

what proportion Dr. Kearl would be paid. Dkt. 374. The parties drafted a proposed order and the

22

Court later entered that order. Dkt. 393. That order does not affect in any way the corollary

23

provision in Rule 706 that “the compensation [of the expert] is then charged like other costs.”

24

Similarly, A.H.D.C. v. City of Fresno, No. CIV-F-97-5498, 2004 WL 5866234 (E.D. Cal.

25

Oct. 1, 2004) does not support Oracle’s argument. In that case, the parties agreed between

26

themselves to split the costs of trial transcripts. Id. at *9. The case did not even involve a Rule

27

706 expert, let alone an order from the Court directing the parties to describe how and when the

28

expert would be paid for his ongoing case work. See id.
9
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA

684249.02

1

The Court’s Order allowing Oracle’s expert—Dr. Iain Cockburn—a third-try at a damages

2

report (Dkt. 702) is further indication that Dr. Kearl’s fees are recoverable as costs. In that Order,

3

the Court ordered that “[a]ll fees and expenses reasonably incurred by Dr. Kearl in responding to

4

the revisions by Dr. Cockburn shall ultimately be borne by Oracle.” Id. at ¶ 7. The Court

5

directed Google to continue to pay its monthly share of Dr. Kearl’s fees, but stated that “Google

6

may demand and recover prompt reimbursement from Oracle for the portion identified by Dr.

7

Kearl as attributable to Dr. Cockburn’s third report.” Id. The Court then stated: “These

8

reimbursement amounts shall not be recoverable costs that Oracle may recover back in the event

9

it prevails in this action.” Id. at ¶ 8. The fact that the Court expressly prohibited Oracle from

10

recovering as costs the fees it paid to Dr. Kearl indicates that, absent a court order, those fees

11

would otherwise be recoverable by Oracle if it had prevailed. See id.

12

Finally, Oracle argues that the Court should disallow recovery of Dr. Kearl’s fees because

13

the case was complex and the court appointed Dr. Kearl in response to damages positions taken

14

by both sides. Dkt. 1225 at 11. Just as Oracle overcomplicated the case by refusing to narrow its

15

patent and copyright claims, Oracle overcomplicated Dr. Kearl’s task by overreaching three times

16

on its damages claims. The best evidence of Oracle’s overreaching is that Google prevailed in

17

whole or substantial part on three separate Daubert motions directed at Oracle’s damages reports.

18

Dkt. 230, 685, 785; see also Dkt. 694 (noting that Oracle had “twice now . . . advanced improper

19

[damages] methodologies obviously calculated to reach stratospheric numbers.”). Dr. Kearl spent

20

significant amounts of time and money familiarizing himself with Oracle’s overbroad patent and

21

copyright claims, and reviewing and preparing to respond to Oracle’s overbroad damages reports.

22

Google, the prevailing party, should not have to bear the costs of Oracle’s refusal to narrow its

23

claims and its failure to submit a reasonable damages report in three tries.

24

III.

25
26

CONCLUSION
For the foregoing reasons, Google respectfully requests that the Court tax costs in the full

amount stated in Google’s Bill of Costs (Dkt. 1216).

27
28
10
GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA
684249.02

1

Dated: August 3, 2012

KEKER & VAN NEST LLP

2
By:

/s/ Robert A. Van Nest
ROBERT A. VAN NEST

3
Attorneys for Defendant
GOOGLE INC.

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
11

GOOGLE’S REPLY TO ORACLE’S OBJECTIONS TO GOOGLE’S BILL OF COSTS
Case No. 3:10-CV-03561 WHA
684249.02