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ABT Systems, LLC v. Emerson Electric Co.

United States District Court, E.D. Missouri, Eastern Division

September 29, 2016

ABT SYSTEMS, LLC, and THE UNIVERSITY OF CENTRAL FLORIDA BOARD OF TRUSTEES, Plaintiffs / Counterclaim Defendants,
v.
EMERSON ELECTRIC CO., Defendant / Counterclaim Plaintiff.

          MEMORANDUM AND ORDER

          AUDREY G. FLEISSIG, UNITED STATES DISTRICT JUDGE.

         This patent infringement case is before the Court on Defendant Emerson Electric Co.'s (“Emerson”) Bill of Costs, following remand of the case by the Federal Circuit Court of Appeals. Plaintiffs (collectively “ABT”) object, arguing that Emerson's Bill of Costs should be denied in its entirety because ABT prevailed on the vast majority of the issues at trial, while Emerson only prevailed on a single dispositive issue on appeal. Alternatively, ABT argues that several of the costs Emerson is seeking are unreasonable and/or not taxable pursuant to 28 U.S.C. §§ 1821 and 1920. The Court concludes that Emerson is entitled to $45, 751.43 of the $47, 916.00 it requests.

         Procedural Background

         ABT asserted that thermostats manufactured and/or sold by Emerson and introduced into the market in 2006 infringed upon two patents owned by ABT (“the '017 Patent” and “the '268 Patent”).[1] By way of counterclaim, Emerson sought a declaratory judgment that none of the thermostats it sold infringed the ABT patents; that the patents were invalid; and that the patents were unenforceable because, among other things, during the patenting process, ABT withheld information from the United States Patent and Trademark Office regarding the scope and content of prior art. In support of a motion for summary judgment, Emerson argued that the patents were invalid due to obviousness. The Court denied that motion on January 16, 2013 (Doc. No. 356), and the case proceeded to a jury trial. The trial started on Monday, February 11, 2013, and continued through Friday, February 15, 2013. The trial adjourned for the weekend and continued on Monday, February 18, 2013. The jury returned a verdict on Thursday, February 21, 2013.

         Armin Rudd, the sole named inventor on the patents, testified as an expert technical consultant for ABT. ABT's witness Tim Cromley testified concerning the sales and profits Emerson allegedly made from the patents. John Vogelzang, Jeffrey Siegel, Max Sherman, and Richard Bero served as expert witnesses for Emerson. Don Fugler and Thomas Scavone were deposed by Emerson, but did not testify at trial.

         The jury returned its verdict on February 21, 2013, following eight days of actual trial. ABT was awarded $311, 379 in damages based on the jury's finding that Emerson was a willful infringer of the '017 Patent. None of Emerson's counterclaims was successful at trial. The Court found, post-trial, that there was no inequitable conduct relating to ABT's prosecution of the patent in question and that Emerson's pre-lawsuit infringement was not willful. The Court awarded costs to Plaintiffs as the prevailing parties in the amount of $39, 181.34. (Doc. No. 566.)

         On August 19, 2015, the United States Court of Appeals for the Federal Circuit reversed, finding that ABT's '017 patent was invalid by reason of obviousness. (Doc. No. 570 at 3.) On November 11, 2015, Emerson submitted its Bill of Costs, the contested items of which will be discussed below. On November 16, 2015, this Court entered judgment on remand in favor of Emerson.

         DISCUSSION

         Pursuant to Rule 54(d)(1) of the Federal Rules of Civil Procedure, “costs-other than attorney's fees-should be allowed to the prevailing party.” The term “costs, ” as used in Rule 54(d)(1), is defined in 28 U.S.C. § 1920, which enumerates the expenses that a federal court may tax as costs under the discretionary authority found in Rule 54(d).[2] Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 445 (1987). Within the statutory framework, the Court has discretion to determine and award costs as appropriate in a given case. Blakley v. Schlumberger Tech. Corp., 648 F.3d 921, 930 (8th Cir. 2011); Little Rock Cardiology Clinic PA v. Baptist Health, 591 F.3d 591, 601 (8th Cir. 2009).

         The party seeking to recover costs must fully establish the amount of compensable costs and expenses to which it is entitled. In re Williams Sec. Litig. WCG Subclass, 558 F.3d 1144, 1148 (10th Cir. 2009). Although the taxation of costs under Rule 54(d) is permissive, the Eighth Circuit has long held that there is a strong presumption that the prevailing party is entitled to an award of costs. Thompson v. Wal Mart Stores, Inc., 472 F.3d 515, 517 (8th Cir. 2006). Where the losing party raises a general objection to an award of costs as inequitable, he bears the burden of demonstrating such inequity. Finan v. Good Earth Tools, Inc., No. 4:06-CV-878 CAS, 2008 WL 1805639, at *9 (E.D. Mo. Apr. 21, 2008) (citing Concord Boat Corp. v. Brunswick Corp., 309 F.3d 494, 498 (8th Cir. 2002)).

         Prevailing Party

         ABT argues that Emerson's request for costs should be denied because “ABT was successful on all of its claims at trial” and in defending against all of Emerson's pre-trial motions, while Emerson “lost all of its defenses and counterclaims at trial, ” and the “sole issue” that Emerson succeeded on was the claim that the '017 patent was invalid, on appeal. (Doc. No. 574 at 2.) Alternatively, ABT argues that “Emerson's recoverable costs should be limited to those incurred prior to [Emerson's] motion for summary judgment” because if this Court “had granted the motion [for summary judgment], much of Emerson's trial costs would have been eliminated.” (Doc. No. 574 at 3.)

         Emerson responds that it is the only prevailing party in this case because the final judgment alone is determinative of which party prevailed. Emerson argues that ABT's success on some pre-trial motions, or even at trial, does not make it the prevailing party, as the final judgment does not award ABT any relief.

         A prevailing party is one “in whose favor a judgment is rendered.” Firefighters' Inst. for Racial Equal. ex rel. Anderson v. City of St. Louis, 220 F.3d 898, 905 (8th Cir. 2000) (citation omitted). Here, final judgment was rendered in favor of Emerson. ABT's victories at trial were rendered moot by its defeat on appeal. Emerson is therefore the prevailing party in this case. Further, ABT's request to limit costs to those ...


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