`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MARYLAND
`
`
`
`INTELLECTUAL VENTURES I LLC,
`et al.,
`
`Plaintiffs/Counter-Defendants,
`
`
`v.
`
`CAPITAL ONE FINANCIAL CORP.,
`et al.,
`
`
`
`
`Case No. DLB-14-111
`
`
`
`
`
`
`
`
`
`
`
`*
`
`*
`
`*
`
`*
`
`*
`
`*
`
`*
`
`*
`
`*
`
`*
`
`*
`
`Defendants/Counterclaimants/
`Third-Party Plaintiffs,
`
`
`v.
`
`INTELLECTUAL VENTURES
`MANAGEMENT, LLC, et al.,
`
`Third-Party Defendants/
`Joined Counter-Defendants.
`
`
`
`
`
`
`MEMORANDUM OPINION AND ORDER
`
`This end-of-litigation dispute requires the Court to determine which among the plaintiffs,
`
`the defendants, and the third-party defendants—each of which prevailed on claims—is “the
`
`prevailing party” for purposes of awarding litigation costs under Rule 54(d) of the Federal Rules
`
`of Civil Procedure. For the reasons stated below, the Court finds the defendants are “the prevailing
`
`party.” The Clerk’s order taxing costs, ECF 722, is affirmed, and the plaintiffs and the third-party
`
`defendants’ joint request for $289,006.39 in costs incurred in the district court is denied.
`
`I.
`
`Procedural History
`
`A. The Claims
`
`This case began in 2014 when the plaintiffs Intellectual Ventures I, LLC and Intellectual
`
`Ventures II, LLC (together, “IV”) filed a patent infringement action against Capital One Financial
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 2 of 13
`
`Corporation and related entities (collectively, “Capital One”). IV alleged that Capital One’s
`
`banking practices infringed five patents in IV’s extensive patent portfolio. After IV voluntarily
`
`dismissed one of its patent infringement claims, four remained. Before IV filed this lawsuit, IV
`
`had filed a nearly identical lawsuit against Capital One in the Eastern District of Virginia asserting
`
`infringement claims based on five other patents. Intell. Ventures I LLC v. Capital One Fin. Corp.,
`
`No. 1:13-cv-00740 (AJT/TCB) (E.D. Va.).1
`
`Here and in Virginia, Capital One filed antitrust counterclaims against IV and a third-party
`
`complaint against three IV-related entities, Intellectual Ventures Management, LLC, Invention
`
`Investment Fund I, L.P., and Invention Investment Fund II, LLC (“IV third-party defendants”)
`
`(collectively with IV, “the IV companies”), for monopolization and attempted monopolization in
`
`violation of Section 2 of the Sherman Act, 15 U.S.C. § 2, and unlawful asset acquisition in violation
`
`of Section 7 of the Clayton Act, 15 U.S.C. § 18. Capital One claimed that the IV companies are
`
`“patent trolls”—companies that acquire patents that are not used to protect an invention but to
`
`obtain a license fee from, or judgment against, an alleged patent infringer. Capital One asserted
`
`that IV’s business practice was to acquire thousands of patents that purportedly deal with
`
`
`1 In that case, IV voluntarily dismissed its claims under two patents with prejudice, conceding as
`to one patent that “proving Defendants’ liability [would be] problematic.” Intell. Ventures I LLC
`v. Cap. One Fin. Corp., No. 1:13CV0740 (AJT/TCB), 2015 WL 7283108, at *1–2 (E.D. Va. Nov.
`17, 2015). The parties stipulated to non-infringement of a third patent, and the court dismissed the
`plaintiffs’ claims under that patent and entered a judgment of non-infringement in Capital One’s
`favor. Intell. Ventures I LLC v. Cap. One Bank (USA), 792 F.3d 1363, 1365 (Fed. Cir. 2015). As
`for infringement claims based on the last two patents, the parties stipulated to the dismissal with
`prejudice of some of them and the dismissal without prejudice of Capital One’s non-infringement
`and invalidity counterclaims. Intell. Ventures I, 2015 WL 7283108, at *1–2. The court entered
`judgment in Capital One’s favor on the remaining infringement claims because the asserted claims
`of the two patents at issue were invalid. Intell. Ventures I, 792 F.3d at 1365–66. The Federal
`Circuit affirmed the judgments in Capital One’s favor. Id.
`
`2
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 3 of 13
`
`technology essential to the commercial banking industry (such as ATMs, mobile banking, and
`
`credit card transactions). Armed with this extensive patent portfolio, IV then made “offers” for
`
`banks to license its entire portfolio for a period of years at extremely high prices. Capital One
`
`alleged that when banks would ask IV for details about the patents covered in the portfolio to
`
`determine whether their services infringe them, IV refused to disclose information that would
`
`allow banks to make an intelligent decision about whether they should agree to the license. If the
`
`banks did not agree to license the portfolio at IV’s offering price, IV then threatened to file a patent
`
`infringement claim against the bank based on a handful of patents. According to Capital One, IV
`
`informs banks that if IV loses the patent infringement case, it will file another case based on a
`
`different set of its patents, until the prospect of endless high-cost litigation forces the bank to
`
`capitulate and to license the entire portfolio. Capital One alleged that the IV companies pursued
`
`this approach with it, first offering to license their patent portfolio, then filing the patent
`
`infringement action in the Eastern District of Virginia, and then filing this action.2
`
`B. Disposition of the Patent Infringement Claims
`
`Capital One defended the patent infringement claims on the ground that the patents were
`
`invalid. The parties engaged in extensive discovery and agreed to refer the matter to a Special
`
`Master experienced in patent law. The Special Master oversaw discovery, and after the parties
`
`extensively briefed the patent infringement claims, he issued two reports and recommendations,
`
`in which he ruled in favor of IV with respect to the ‘081 and ‘002 patents and in favor
`
`of Capital One with respect to the ‘409 and ‘084 patents. Both parties challenged the Special
`
`Master’s rulings adverse to them, and further briefing ensued. The Court ultimately overruled the
`
`
`2 This summary of Capital One’s allegations is taken largely from the Court’s opinion on the
`antitrust claims, Intellectual Ventures I LLC v. Capital One Fin. Corp., 280 F. Supp. 3d 691, 696–
`97 (D. Md. 2017).
`
`3
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 4 of 13
`
`Special Master with respect to the ‘081 and ‘002 patents and found that they were invalid under
`
`35 U.S.C. § 101. The Court further ruled that IV was collaterally estopped from bringing the
`
`infringement claims regarding the ‘409 and ‘084 patents because the United States District Court
`
`for the Southern District of New York, in Intellectual Ventures v. JPMC, Case No. 13-3777-
`
`AKH, 2015 WL 1941331 (S.D.N.Y. Apr. 28, 2015), previously concluded those patents, too, were
`
`invalid under 35 U.S.C. § 101. Without any valid patents, IV’s infringement claims against Capital
`
`One failed as a matter of law. The Court entered summary judgment in Capital One’s favor on all
`
`of IV’s claims. Intell. Ventures I LLC v. Capital One Fin. Corp., No. PWG-14-111, 2015 WL
`
`5201356 (D. Md. Sept. 4, 2015). The Federal Circuit affirmed. Intell. Ventures I LLC v. Capital
`
`One Fin. Corp., 850 F.3d 1332 (Fed. Cir. 2017).
`
`C. Disposition of the Antitrust Claims
`
`IV defended Capital One’s antitrust claims on the ground that it legitimately purchases
`
`valid and enforceable patents and then offers to license its patent portfolio to banks, beginning
`
`with an opening offer and expecting the bank to counteroffer and the parties eventually to agree
`
`on a licensing fee. When Capital One and IV did not come to an agreement, IV filed suit against
`
`the bank, which IV characterizes as an “efficient infringer”—an entity that engages in its business
`
`without regard for whether it infringes on patents held by others, knowing that a patent
`
`infringement case is expensive and many patent holders do not have the resources to protect their
`
`rights. The IV companies unsuccessfully opposed Capital One’s motion for leave to amend to add
`
`4
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 5 of 13
`
`the counterclaims and unsuccessfully twice moved to dismiss the counterclaims and the third-party
`
`complaint for failure to state a claim.3
`
`After another round of extensive discovery and the appointment of a technical advisor, the
`
`Court granted summary judgment in favor of the IV companies on the antitrust claims. The Court
`
`found that the IV companies were immune from antitrust liability by the Noerr–Pennington
`
`doctrine, which protects private parties from antitrust liability based on unsuccessful litigation
`
`attempts to enforce laws with potentially anti-competitive effects. The Court also found that
`
`Capital One was collaterally estopped from asserting the antitrust claims because the Virginia court
`
`previously dismissed Capital One’s identical antitrust claims for failure to adequately allege a
`
`relevant market. This Court found that the definition of the alleged market in the Virginia case
`
`was materially the same as the market alleged in this case. Capital One, therefore, was collaterally
`
`estopped from asserting antitrust claims against IV based on the market definition the Virginia
`
`court found legally inadequate. Intellectual Ventures I LLC v. Capital One Fin. Corp., 280 F.
`
`Supp. 3d 691, 696–97 (D. Md. 2017). The Federal Circuit affirmed on collateral estoppel grounds.
`
`Intell. Ventures I LLC v. Capital One Fin. Corp., 937 F.3d 1359, 1378 (Fed. Cir. 2019).
`
`The IV companies filed a bill of costs seeking $289,006.39 in costs incurred in defending
`
`the antitrust claims and $266.33 in appellate costs. ECF 711. The Clerk concluded that Capital
`
`One was the “prevailing party,” denied the IV companies’ request for $289,006.39 in costs, and
`
`
`3 The IV companies’ efforts in Virginia to dismiss Capital One’s antitrust counterclaims on a Rule
`12(b)(6) motion were successful. The Virginia court dismissed the antitrust counterclaims because
`Capital One did not allege a relevant market. Intell. Ventures I LLC v. Cap. One Fin. Corp., No.
`1:13-CV-00740 AJT, 2013 WL 6682981, at *1 (E.D. Va. Dec. 18, 2013). The legally insufficient
`market for antitrust purposes consisted “of the ‘3,500 or more patents that [the IV companies]
`allege[] cover widely used financial and retail banking services in the United States.’” Intell.
`Ventures I LLC v. Capital One Fin. Corp., 937 F.3d 1359, 1378 (Fed. Cir. 2019) (discussing Intell.
`Ventures I, 2013 WL 6682981).
`
`5
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 6 of 13
`
`granted the request for appellate costs. ECF 722. The IV companies filed a motion to review the
`
`Clerk’s denial of costs. ECF 723. The issue is fully briefed. ECF 724 & 725. A hearing is not
`
`necessary. See Loc. R. 105.6. For the following reasons, the Clerk’s order is affirmed.
`
`II.
`
`Standard of Review
`
`Rule 54(d) provides that “[u]less a federal statute, these rules, or a court order provides
`
`otherwise, costs—other than attorney’s fees—should be allowed to the prevailing party.” Fed. R.
`
`Civ. P. 54(d)(1). The Clerk may tax costs, and the Court may review the Clerk’s order. Id.; see
`
`also Loc. R. 109.1. The review is de novo. Schwartz v. Rent-A-Wreck, No. PJM-07-1679, 2016
`
`WL 3906581, at *2 (D. Md. July 14, 2016). In a patent case such as this, “Federal Circuit law
`
`governs the determination of which party has prevailed.” SSL Servs., LLC v. Citrix Sys., Inc., 769
`
`F.3d 1073, 1086 (Fed. Cir. 2014).
`
`III. Discussion
`
`The IV companies principally argue the Clerk erred by (i) finding there can be only one
`
`prevailing party and (ii) finding Capital One was the prevailing party. Each argument is addressed
`
`in turn.
`
`A. There is Only One Prevailing Party
`
`The Clerk determined that there can be only one prevailing party for purposes of awarding
`
`costs in patent cases. This determination was based on the seminal Federal Circuit case that set
`
`the standard for awarding costs in patent cases with mixed judgments, Shum v. Intel Corp., 629
`
`F.3d 1360 (Fed. Cir. 2010). By “establishing a single definition of prevailing party in the context
`
`of patent litigation,” the Federal Circuit ensures uniformity in these cases. Manildra Milling Corp.
`
`v. Ogilvie Mills, Inc., 76 F.3d 1178, 1182 (Fed. Cir. 1996). In Shum, the Federal Circuit held
`
`unequivocally that “there can only be one prevailing party in a given case . . . .” 629 F.3d at 1367.
`
`6
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 7 of 13
`
`Its holding was rooted in the text of the rule—“the prevailing party”—which “unambiguously
`
`limits the number of prevailing parties to a given case to one because the operative term,
`
`‘prevailing party,’ is singular.” Id. (emphasis removed). This conclusion was “reinforced by the
`
`use of the definite article ‘the’ before ‘prevailing party,’” which proves that Congress intended
`
`“prevailing party” to be “specific and limited to a single party.” Id. The Court further observed
`
`that Rule 54(d) has “no special rule or exception for mixed judgment cases, where both parties
`
`have some claims decided in their favor . . . .” Thus, the Court held, “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.” Id.
`
`The IV companies try to distinguish Shum from this case. They argue that Shum’s holding
`
`is limited to its specific facts, which involved dueling requests for costs by the plaintiff and the
`
`defendant, both of which “won on some claims and lost on others.” 629 F.3d at 1363. This case,
`
`unlike Shum, does not involve dueling claims for costs (Capital One has sought none), and unlike
`
`in Shum, it involves parties—the IV thirty-party defendants—that won on all claims involving
`
`them and lost on none. Citing these differences, the IV companies urge the Court not to follow
`
`Shum and instead to follow decisions that have awarded costs to more than one party in multiparty
`
`cases. ECF 723, at 4–5 (citing Kollsman v. Cohen, 996 F.2d 702, 706 (4th Cir. 1993); Jean v.
`
`Krauss, No. 13-CV-6255-FPG, 2015 WL 430116, at *1 (W.D.N.Y. Feb. 2, 2015); Blanco v.
`
`Biscayne Wine Grp., LLC, No. 10-23988-CIV, 2014 WL 2653922, at *1, *2, *6 (S.D. Fla. June
`
`13, 2014); Tubbs v. Sacramento Cnty. Jail, 258 F.R.D. 657, 659 (E.D. Cal. 2009)). But none of
`
`these was a patent case governed by Federal Circuit law, which the Court must follow here. B.E.
`
`7
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 8 of 13
`
`Tech., L.L.C. v. Facebook, Inc., 940 F.3d 675, 677 (Fed. Cir. 2019); Shum, 629 F.3d at 1366.4 And
`
`the distinctions that the IV companies identified between this case and Shum are not meaningful.
`
`Shum’s holding that there can be only one prevailing party was based on the text of Rule 54(d),
`
`which applies to all cases, not only those involving dueling cost petitions or parties that each won
`
`and lost claims. Shum applies to all mixed judgment patent cases, including this one.
`
`B. Capital One is the Prevailing Party
`
`Having established there can be only one prevailing party, the Court must decide which it
`
`is. “To be a ‘prevailing party,’ . . . the party [must] have received at least some relief on the merits”
`
`and “[t]hat relief must [have] materially alter[ed] the legal relationship between the parties by
`
`modifying one party’s behavior in a way that ‘directly benefits’ the opposing party.” Shum, 629
`
`F.3d at 1367 (quoting Farrar v. Hobby, 506 U.S. 103, 111–13 (1992)); SSL Servs., 769 F.3d at1086
`
`(quoting Shum). “A party is not required . . . to prevail on all claims in order to qualify as a
`
`prevailing party under Rule 54,” but “just because a party can be said to have ‘prevailed’ on a
`
`claim does not necessarily make him a ‘prevailing party’ as the term is used in Rule 54.” Shum,
`
`629 F.3d at 1367–68 (citing Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A. de C.V.,
`
`464 F.3d 1339, 1347–48 (Fed. Cir. 2006)). For a defendant to be a prevailing party, the defendant
`
`
`4 The Fourth Circuit’s holding in Kollsman v. Cohen, 996 F.2d 702, 706 (4th Cir. 1993), does not
`apply here because Kollsman was not a patent case, it predates Shum, and it is factually distinct.
`In Kollsman, the plaintiff settled his Department of Defense bid-rigging conspiracy claims with
`the corporate defendants and voluntarily dismissed his claims against a high-ranking member of
`the Air Force, who was convicted of a crime for related conduct and was given a court-appointed
`guardian ad litem to represent him in the civil action. The question was whether the plaintiff had
`to pay the costs and fees of the guardian ad litem. With limited analysis, the Fourth Circuit held
`that the plaintiff was the prevailing party as to the corporate defendants but he was not the
`prevailing party as to the individual defendant. The plaintiff, therefore, had to pay the fees and
`costs of the guardian ad litem. Even if application of the holding in Kollsman meant the IV third-
`party defendants were the prevailing party—and the Court is not convinced it would—the Court
`nevertheless would exercise its discretion to decline a cost award for the reasons stated later in this
`opinion.
`
`8
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 9 of 13
`
`“need not [have] obtain[ed] a favorable judgment on the merits,” as the defendant’s objective is to
`
`avoid a court judgment that materially alters the parties’ legal relationship in favor of the plaintiff.
`
`CRST Van Expedited, Inc. v. E.E.O.C., 578 U.S. 419, 431 (2016); Raniere v. Microsoft Corp., 887
`
`F.3d 1298, 1304 (Fed. Cir. 2018) (quoting CRST). Therefore, “[t]he defendant may prevail even
`
`if the court’s final judgment rejects the plaintiff’s claim for a nonmerits reason.” CRST Van, 578
`
`U.S. at 431; Raniere, 887 F.3d at 1304. Ultimately, the Court’s “inquiry . . . focuses on the relief
`
`[each party that won a claim] respectively received.” Shum, 629 F.3d at 1368.
`
`In this case, all parties prevailed on all claims they were defending. Capital One prevailed
`
`on all of IV’s patent infringement claims, and the IV companies prevailed on all of Capital One’s
`
`antitrust claims. In each of these victories, the claiming parties were “rebuffed,” which “fulfilled
`
`[the defending parties’] primary objective.” See CRST, 578 U.S. at 431. This is enough for any
`
`of them to be a prevailing party. See id.
`
`To narrow down which is “the prevailing party,” the Court compares “the relief [each
`
`party] respectively received.” Id. In defeating IV’s patent infringement claims, Capital One
`
`obtained a judgment that IV’s four patents were invalid and unenforceable. This allowed Capital
`
`One to continue its business practices without having to pay a licensing fee to IV for banking
`
`practices relating to the four patents. Capital One’s victory has preclusive effect as to the four
`
`patents, and it “materially alter[ed] the legal relationship” between Capital One and IV. See Shum,
`
`629 F.3d at 1367. The IV companies may no longer demand licensing fees from Capital One based
`
`on these four patents. This outcome significantly modifies the IV companies’ behavior in way that
`
`directly benefits Capital One.
`
`By contrast, the judgment that the IV companies obtained against Capital One did not
`
`materially alter their relationship with the bank. Their victory on Capital One’s antitrust claims
`
`9
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 10 of 13
`
`was limited in scope. The Federal Circuit affirmed the Court’s judgment that Capital One was
`
`precluded from bringing antitrust claims based on the Virginia court’s prior finding that the alleged
`
`relevant market was legally insufficient to state an antitrust claim. Intell. Ventures I, 937 F.3d at
`
`1378. This does not mean the IV companies, by virtue of their win, have foreclosed future lawsuits
`
`against them by Capital One. As the Virginia court observed, it could “be imagined that, at some
`
`point, were IV to engage in the kind of endless, unsuccessful litigation described by Capital One,
`
`IV would incur legal liability,” and although “the antitrust laws appear ill suited as a remedy for
`
`what Capital One fears,” Capital One could challenge IV’s conduct “through various doctrines of
`
`tort liability, statutory fees or judicial sanctions.” Intell. Ventures I LLC v. Cap. One Fin. Corp.,
`
`No. 1:13-CV-00740 AJT, 2013 WL 6682981, at *8 (E.D. Va. Dec. 18, 2013). Thus, Capital One
`
`is not clearly precluded from bringing claims against the IV companies for attempting to enforce
`
`invalid patents. IV’s legal relationship with the bank was not materially altered by its victory on
`
`the antitrust claims.
`
`The IV companies argue that they are the prevailing parties because the time and expense
`
`to litigate the antitrust claims, which they won, far exceeded the time and expense to litigate the
`
`patent claims, which Capital One won. While it may be true that the antitrust claims were more
`
`expensive and resource-intensive to litigate than the patent claims, this case was, at its core, a
`
`patent lawsuit instigated by IV to enforce patents in its patent portfolio against Capital One. The
`
`antitrust claims came in response to the patent claims as part of Capital One’s two-pronged
`
`defense: (i) it attacked the invalidity of the patents, which was successful, and (ii) it filed antitrust
`
`claims to prevent the IV companies from pursuing these patent claims against them, which was
`
`unsuccessful. The antitrust claims were but another way to challenge the enforceability of the IV
`
`companies’ patents. If IV had not initiated patent infringement actions against Capital One,
`
`10
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 11 of 13
`
`Capital One would not have had a basis for its counterclaims. This case was essentially a patent
`
`case, which Capital One won.
`
`The IV companies insist it would defy common sense to deny costs to the IV third-party
`
`defendants which, unlike Capital One, prevailed on all claims and lost on none. But just because
`
`the IV third-party defendants defeated every claim asserted against them does not “necessarily
`
`make [them] a ‘prevailing party.’” Shum, 629 F.3d at 1367–68; Kemin Foods, 464 F.3d at 1347–
`
`48. The Court must consider which party’s victory was more successful. On that front, while the
`
`IV third-party defendants were undefeated and Capital One lost some claims, the former’s
`
`complete victory did not materially alter its legal relationship with the latter. Capital One obtained
`
`a resounding and legally significant victory on the patent claims asserted by IV, which cannot be
`
`overshadowed by the IV third-party defendants’ complete success on the claims against them.
`
`C. Cost Award to Any of the IV Companies Would be Inequitable
`
`Even if the IV companies, or some subset of them, were the prevailing party, the Court
`
`would exercise its discretion to deny costs, notwithstanding the “presumption in favor of an award
`
`of costs to the prevailing party.” Williams v. Metro. Life Ins. Co., 609 F.3d 622, 636 (4th Cir.
`
`2010) (citing Teague v. Bakker, 35 F.3d 978, 996 (4th Cir. 1994)); Shum, 629 F.3d at 1367
`
`(“[E]ven if a party satisfies [the] prevailing party test, the trial court ‘retains broad discretion as to
`
`how much to award, if anything.’”) (quoting Manildra, 76 F.3d at 1183 (emphasis added in Shum);
`
`citing Farrar, 506 U.S. at 115)). “Costs may be denied to the prevailing party only when there
`
`would be an element of injustice in a presumptive cost award.” Cherry v. Champion Int’l Corp.,
`
`186 F.3d 442, 446 (4th Cir. 1999) (quoting Teague, 35 F.3d at 996). If the Court decides not to
`
`award costs, it must “articulat[e] some good reason” to “justify its decision[.]” Id. (citing Delta
`
`Air Lines, Inc. v. August, 450 U.S. 346, 355 n.14 (1981)). The Court may deny costs to penalize
`
`11
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 12 of 13
`
`the prevailing party for misconduct. Id. Other reasons include if the issues were close and difficult
`
`to decide, if the losing party cannot pay, if the costs are excessive, and if the prevailing party’s
`
`success has little value. Id.; see also Teague, 35 F.3d at 996.
`
`Here, there would be an element of injustice in awarding costs to the IV companies. Capital
`
`One prevailed on the four patent claims that IV pursued, and the catalyst for Capital One’s antitrust
`
`claims was the IV companies’ repeated patent litigation against it and other banks. Although
`
`Capital One lost on the claims that were most expensive to litigate, it, too, incurred significant
`
`costs, and IV, as the instigator, should not benefit from a non-merits victory that does not
`
`necessarily prevent future claims based on its attempted patent enforcement. This unjust result
`
`could not be avoided if the Court were to award costs only to the wholly successful IV third-party
`
`defendants, because they and IV are represented by the same counsel, share the same CEO and
`
`office space, and function as different parts of the same operation. One of the IV plaintiffs and
`
`two of the IV third-party defendants are legal entities without employees, and the other third-party
`
`defendant manages the employee-less plaintiff, which functions as the holder of the patents the IV
`
`companies seek to enforce. ECF 228, ¶¶ 11, 13; ECF 436, ¶¶ 11, 13; ECF 439, ¶¶ 12, 13; ECF
`
`446, ¶¶ 12, 13; see Xilinx, Inc. v. Invention Inv. Fund I LP, No. C 11-0671 SI, 2011 WL 3206686,
`
`at *1 (N.D. Cal. July 27, 2011) (noting the IV companies share a principal place of business). It
`
`would be blatantly unfair to award costs to the IV third-party defendants when the award obviously
`
`would benefit all the IV companies.
`
`In addition to an award of costs being unjust, the closeness and difficulty of the issues
`
`decided counsels against awarding costs. The antitrust claims withstood the IV companies’
`
`opposition to Capital One’s motion for leave to amend to add counterclaims and the IV companies’
`
`motions to dismiss. It was not until the conclusion of extensive discovery that the Court granted
`
`12
`
`
`
`Case 8:14-cv-00111-DLB Document 726 Filed 03/29/23 Page 13 of 13
`
`summary judgment to the IV companies. As for the patent claims, they, too, were litigated
`
`intensely, and the issues were close and difficult enough that the Court and Special Master reached
`
`different outcomes, with the Special Master recommending judgment in favor of IV on two of its
`
`four patent claims. This was a long, expensive, hard-fought war with difficult and close issues
`
`decided for and against both sides. Therefore, an award of costs to the IV companies, if they were
`
`the prevailing party, would be denied as unjust. See Shum, 629 F.3d at 1367; Miller v. Asensio &
`
`Co., 364 F.3d 223, 235 n.10 (4th Cir. 2004) (concluding district court “did not abuse its discretion
`
`by declining to award costs” where “the case ‘was a close and difficult one’ with small recovery
`
`that amounted to victory ‘in name only’”); Buzz Off Insect Shield, LLC v. S.C. Johnson & Son,
`
`Inc., 606 F. Supp. 2d 571, 592 n.4 (M.D.N.C. 2009) (noting “the size and scope of the litigation”
`
`and concluding that “each side should bear its own costs” where “both sides prevailed as to certain
`
`claims in this case, with neither side obtaining a more substantial win than the other”).
`
`IV. Conclusion
`
`The Clerk’s order taxing costs, ECF 722, is affirmed. The plaintiffs and the third-party
`
`defendants’ joint request for $289,006.39 in costs incurred in the district court is denied. The Clerk
`
`will award appellate costs in the amount of $266.33.
`
`
`
`Dated: March 29, 2023
`
`
`
`
`
`
`
`
`
`
`
`
`Deborah L. Boardman
`United States District Judge
`
`13
`
`