Studiengesellschaft Kohle mbH v. Eastman Kodak Co.

• Decision Date: 29 August 1983
• Docket Number: No. 82-2254,82-2254
• Citation: 219 USPQ 958,713 F.2d 128
• Parties: STUDIENGESELLSCHAFT KOHLE mbH, as trustee for the Max-Planck-Institut fur Kohlenforschung, Plaintiff-Appellant, v. EASTMAN KODAK COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 128

713 F.2d 128

219 U.S.P.Q. 958

STUDIENGESELLSCHAFT KOHLE mbH, as trustee for the Max-Planck-Institut fur Kohlenforschung, Plaintiff-Appellant, v. EASTMAN KODAK COMPANY, Defendant-Appellee.

No. 82-2254.

United States Court of Appeals, Fifth Circuit.

Aug. 29, 1983.

As Amended on Denial of Rehearing Oct. 14, 1983.

Arnold Sprung, Nathaniel D. Kramer, New York City, for plaintiff-appellant.

Francis T. Carr, Kenneth E. Madsen, William J. Speranza, New York City, O.J. Weber, Beaumont, Tex., for defendant-appellee.

Appeals from the United States District Court for the Eastern District of Texas.

Before CLARK, Chief Judge, GOLDBERG and REAVLEY, Circuit Judges.

CLARK, Chief Judge:

Studiengesellschaft Kohle mbH (SGK) is a West German company which acts as the agent for the Max-Planck-Institut fur Kohlenforschung, a nonprofit research and educational institute formerly headed by the Nobel Prize-winning inventor, Dr. Karl Ziegler. This litigation arose in 1974 when SGK sued Eastman Kodak Company for infringement of Ziegler patents covering certain chemical catalysts useful in the polymerization of hydrocarbons. SGK accused Kodak of violating U.S. Letters Patent No. 3,113,115 ('115); No. 3,257,332 ('332); No. 3,231,515 ('515); No. 3,392,162 ('162); and No. 3,826,792 ('792). Kodak denied the infringement and filed a counterclaim alleging that the patents were illegal because of prior art. Before trial, the claims relating to the '115 patent were dismissed with prejudice.

The trial court found that Kodak had not infringed the remaining patents. The court held that certain claims of the '792 patent were invalid and, in the alternative, SGK's claims were barred by laches. Studiengesellschaft Kohle v. Eastman Kodak, 450 F.Supp. 1211 (E.D.Tex.1977).

This court reversed the district court's holdings that SGK's suit was barred by laches and estoppel and its determination that certain claims of the '792 patent were invalid, but it affirmed the district court's holding that Eastman Kodak had not infringed either the '332 or the '792 patents. Studiengesellschaft Kohle mbH v. Eastman Kodak Co., 616 F.2d 1315 (5th Cir.), cert. denied, 449 U.S. 1014, 101 S.Ct. 573, 66 L.Ed.2d 473 (1980). ¹ Its mandate directed that each party was to bear its own costs on appeal.

On March 2, 1981, the district court entered a final judgment in this case pursuant to the mandate in which it held: (1) the suit was not barred by laches or estoppel; (2) Kodak had not infringed the '332, the '792, the '515, and the '162 patents (the latter two patents were not part of the appeal) (3) the '515 and the '162 patents were invalid; (4) SGK's action for an injunction and damages was dismissed; (5) Kodak's counterclaim for a declaratory judgment that the '792 and '332 patents were invalid was denied; and (6) Kodak was entitled to an award of its costs as the prevailing party. Kodak then filed its bill of costs to which SGK filed its objections. Kodak filed a motion on June 15, 1981, to tax costs with a new bill of costs attached. The parties briefed and argued the question of costs. On May 20, 1982, the district court ordered SGK to pay Kodak's costs of $90,432.48, the amount claimed in Kodak's bill of costs. On June 18, 1982, SGK filed a timely notice of appeal from the May 20 order. On June 23, 1982, Kodak filed a motion requesting an amendment of the May 20 order to provide for post-judgment interest on costs at the rate of 9% in the amount of $37,951.89. The motion also requested that the 9% interest accrue until the costs are paid. The district court granted the motion ex parte on the same day that Kodak filed it and awarded $37,951.89 in interest until May 20, 1982, and 9% thereafter. SGK also appeals from the award of interest.

Costs

The district court's final judgment, entered March 2, 1981, declared Kodak the prevailing party, entitling it to an award of costs. This judgment was incorporated into the court's order of May 20, 1982, awarding $90,432.48 in costs. SGK first argues that the award of costs was improper because Kodak was not the prevailing party. Kodak argues that we should not consider this issue because SGK has already raised it once in its original appeal of the 1977 judgment and again on remand, failing both times to get the 1977 judgment changed in that respect. Hence, Kodak argues, SGK should be precluded from raising this issue again on this appeal. Additionally, Kodak argues that SGK failed to file a notice of appeal after the district court's 1981 "final judgment" which held that Kodak was a prevailing party entitled to costs. Neither of Kodak's arguments has merit. First, issue preclusion is applicable only in subsequent actions, not within the same action. See G. & C. Merriam Co. v. Saalfield, 241 U.S. 22, 29, 36 S.Ct. 477, 480, 60 L.Ed. 868 (1916). Second, the 1981 "final judgment" that Kodak was the prevailing party is not a final judgment for the purpose of appeal under 28 U.S.C. § 1291. Cf. Williams v. Ezell, 531 F.2d 1261, 1263 (5th Cir.1976).

Rule 54(d) of the Federal Rules of Civil Procedure provide that costs shall be allowed as of course to the prevailing party. But SGK argues that since neither party prevailed on a substantial portion of its principal claims, neither party was a prevailing party.

Our standard of review in an award of costs case is abuse of discretion, Kinnear-Weed Corp. v. Humble Oil & Ref. Co., 441 F.2d 631 (5th Cir.), cert. denied, 404 U.S. 941, 92 S.Ct. 285, 30 L.Ed.2d 255 (1971). Here there was no abuse. A party need not prevail on all issues to justify an award of costs. United States v. Mitchell, 580 F.2d 789, 793 (5th Cir.1978); 10 C. Wright & A. Miller, Federal Practice and Procedure § 2667 at 180-81. The case must be viewed as a whole to determine who is the prevailing party. Based on such a view, there was no abuse of the district judge's discretion in his determination that Kodak was the prevailing party. Kodak successfully repelled SGK's attempt to obtain money damages for alleged infringement of four patents and an injunction against (or royalty payments for) alleged future infringement. All four patents were held to be noninfringed and two of the patents were found to be invalid. That was a more than sufficient basis on which the district court could find Kodak to be the prevailing party.

On appeal from the initial district court decision, this court ordered both parties to bear their own appellate costs. SGK contends that this should somehow affect the assessment of costs related to trial. Rule 39(a) of the Federal Rules of Appellate Procedure dictates that the disposition of the appeal is the deciding factor in the assessment of appellate costs. It has no relevance to the trial costs.

SGK contends, however, that the Supreme Court's recent decision in Hensley v. Eckerhart, --- U.S. ----, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), dictates a different result. Hensley required that courts consider the relationship between the extent of success and the amount of an attorney's fee award under 42 U.S.C. § 1988. 103 S.Ct. at 1943. The Court held:

The court's finding that "the [significant] extent of relief clearly justifies the award of a reasonable attorney's fee" does not answer the question of what is "reasonable" in light of that level of success. We emphasize that the inquiry does not end with a finding that the plaintiff obtained significant relief. A reduced fee award is appropriate if the relief, however significant, is limited in comparison to the scope of the litigation.

Id. 103 S.Ct. at 1942-43 (footnote omitted).

Hensley has applicability in a "costs setting" because an award of attorneys' fees under section 1988 requires that the court determine if the fees applicant is a prevailing party--the same determination that must be made for an award of costs under Rule 54(d). Additionally, the Court noted in Hensley that "[t]he standards set forth in this opinion are generally applicable in all cases in which Congress has authorized an award of fees to a 'prevailing party.' " Id. 103 S.Ct. at 1939 n. 7.

However, Hensley fails to alter our result. Kodak prevailed in this courtroom battle. SGK brought Kodak into court and charged that it was infringing upon five of SGK's patents. After some nine years of litigation, not only may Kodak continue to use its polymer process free from charges of patent infringement, it has also won declarations that two of SGK's patents are invalid. Hensley does not require that the litigant win all claims to be a prevailing party. It only requires that the extent of a litigant's success be viewed in light of the entire litigation. Kodak's success was sufficient to justify the district court's finding that it was a prevailing party under Hensley. That case does not require the apportionment of costs in relation to the extent of the litigant's success on all claims made by any numerical formula.

SGK argues next that the district court erred in awarding Kodak $90,432.48 in costs. SGK contends that Kodak has no right to collect all of its out-of-pocket expenses related to the litigation.

The award of costs is largely controlled by statute. Under 28 U.S.C. § 1920, a judge may tax as costs:

(1) Fees of the clerk and marshal;

(2) Fees of the court reporter for all or any part of the stenographic transcript necessarily obtained for use in the case;

(3) Fees and disbursements for printing and witnesses;

(4) Fees for exemplification and copies of papers necessarily obtained for use in the case;

(5) Docket fees under section 1923 of this title;

(6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.

The Supreme Court has said that the discretion of district judges to tax costs should be sparingly exercised regarding expenses not specifically allowed by statute. Farmer v. Arabian American Oil Co., 379 U.S. 227, 235, 85...