IN THE UNITED STATES DISTRICT COURT
`FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
`
`
`
`
`
`Civil Action No. 1:17-cv-
`00687
`
`
`
`
`
`
`OPTOLUM, INC.,
`
`
`Plaintiff,
`
`v.
`
`CREE, INC.,
`
`Defendant.
`
`
`
`OPTOLUM, INC.’S MOTION AND MEMORANDUM FOR DISALLOWANCE OF
`COSTS
`
`I. BACKGROUND
`Plaintiff OptoLum, Inc. (“OptoLum”) filed suit against
`Cree on November 3, 2016. After a jury trial, the jury
`found non-infringement of all asserted claims in November
`2021. OptoLum began the wind down of its business shortly
`thereafter, and ceased all operations on or around March 31,
`2022.
`
`An appeal to the Federal Circuit was denied on June 12,
`2023. On July 19, 2023, the Federal Circuit issued the
`Mandate to this District. On August 11, 2023, Defendant
`Cree, Inc. filed a Bill of Costs, Dkt. No. 391, that
`included costs that are not properly taxable under the
`
`
`ME1 30291008v.1
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 1 of 12
`
`
`FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
`
`
`
`
`
`Civil Action No. 1:17-cv-
`00687
`
`
`
`
`
`
`OPTOLUM, INC.,
`
`
`Plaintiff,
`
`v.
`
`CREE, INC.,
`
`Defendant.
`
`
`
`OPTOLUM, INC.’S MOTION AND MEMORANDUM FOR DISALLOWANCE OF
`COSTS
`
`I. BACKGROUND
`Plaintiff OptoLum, Inc. (“OptoLum”) filed suit against
`Cree on November 3, 2016. After a jury trial, the jury
`found non-infringement of all asserted claims in November
`2021. OptoLum began the wind down of its business shortly
`thereafter, and ceased all operations on or around March 31,
`2022.
`
`An appeal to the Federal Circuit was denied on June 12,
`2023. On July 19, 2023, the Federal Circuit issued the
`Mandate to this District. On August 11, 2023, Defendant
`Cree, Inc. filed a Bill of Costs, Dkt. No. 391, that
`included costs that are not properly taxable under the
`
`
`ME1 30291008v.1
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 1 of 12
`
`
`
`applicable rules, including for: hearing transcripts; daily
`trial transcripts; deposition transcripts for witnesses who
`did not testify at trial and which were not admitted into
`evidence; additional copies and video fees for depositions
`of witnesses that did testify at trial; fees for witnesses
`that did not appear at trial; creation of counsel copies of
`trial exhibits; printing of unidentified documents; and
`creation of trial graphics.
`
`It would be unjust and inequitable to award any costs
`in this case, as OptoLum has ceased all operations,
`liquidated its assets, and has no ability to pay, now or in
`the future. Furthermore, as will be detailed below, the
`large majority of costs included in Cree’s Bill of Costs
`are not properly taxable and, to the extent that any award
`of costs is made, OptoLum requests that these inappropriate
`costs be disallowed by the Clerk.
`II. STATEMENT OF THE LAW
`Under Rule 54(d) of the Federal Rules of Civil
`Procedure, the prevailing party is generally entitled to
`“costs other than attorneys’ fees.” Fed. R. Civ. P. 54(d).
`28 U.S.C. § 1920 provides that a judge or clerk of any
`2
`
`
`ME1 30291008v.1
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 2 of 12
`
`
`
`court may tax as costs, inter alia, fees for transcripts
`necessarily obtained for use in the case, fees for printing
`and witnesses, and fees for exemplification and making
`copies necessarily obtained for use in the case. 28 U.S.C.
`§ 1920. Additionally, L.R. 54.1 states, “a prevailing
`party may request the clerk to tax allowable costs in a
`civil action as part of a judgment or decree by filing a
`bill of costs . . . .” In order to assist parties in the
`preparation of bills of cost, the Clerk’s Office of this
`District has prepared Guidelines for filing Bills of Costs
`(“Costs Guide”).1
`III. ARGUMENT
`A. It Is Inequitable and Unjust to Tax Costs Against
`OptoLum
`In the Fourth Circuit, while Fed. R. Civ. P. 54(d)(1)
`intends to grant costs to the prevailing party as a matter
`of routine, the district court retains the discretion to
`deny an award of costs when there is an element of
`unfairness or injustice. Cherry v. Champion Int’l Corp.,
`186 F.3d at 444 (4th Cir. 1999).
`
`1https://www.ncmd.uscourts.gov/sites/ncmd/files/BOC_Guide.pd
`f, last accessed Aug. 24, 2023.
`
`3
`
`
`ME1 30291008v.1
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 3 of 12
`
`
`
`Among the factors for consideration are: (1)
`misconduct by the prevailing party; (2) the
`unsuccessful party's inability to pay the
`costs; (3) the excessiveness of the costs in a
`particular case; (4) the limited value of the
`prevailing party's victory; or (5) the
`closeness and difficulty of the issues decided.
`Ellis v. Grant Thornton LLP, 434 Fed. App'x, 232, 235 (4th
`Cir. 2011)(citing Cherry, 186 F.3d at 446).
`
`The court may deny costs “if the non-prevailing party
`is of sufficiently ‘modest means’ such that it would be
`unjust or inequitable to enforce Fed. R. Civ. P. 54(d)(1)
`against him.” Skeberdis v. Brill, No. 1:17-cv-00404-PX,
`2019 U.S. Dist. LEXIS 189034, 2019 WL 5625849, at *2 (D. Md.
`Oct. 31, 2019) (citing Cherry v. Champion Int’l Corp., 186
`F.3d 442, 447 (4th Cir. 1999))(finding that Plaintiff’s
`limited income rendered assessment of costs inequitable and
`that the closeness of the case warranted a denial of costs).
`
`Here, requiring OptoLum to cover costs would similarly
`create an element of unfairness and injustice because
`OptoLum is no longer in the financial position to incur
`such costs. See Giles v. United States, No.: BPG-18-62,
`2020 U.S. Dist. LEXIS 31991, at *5 (D. Md. Feb. 25, 2020).
`At the time that the Complaint was filed in 2016, OptoLum
`4
`
`
`ME1 30291008v.1
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 4 of 12
`
`
`
`was a going concern. In the years since, however,
`particularly
`following
`the
`COVID
`pandemic,
`OptoLum
`experienced a financial downturn, and ultimately made the
`decision to wind down its business in early 2022. It made
`its last sales in February 2022, its last shipment of
`product in March 2022 and by the end of March 2022 had
`auctioned off its remaining assets, disposed on non-salable
`items, laid off its final employees and completed the wind-
`down of its business. See Declaration of Karen L. Baker,
`¶¶ 2-6, attached hereto at Exhibit B. On March 31, 2022,
`OptoLum turned its commercial space over to the landlord,
`and since then has not received or fulfilled a single order
`and has no ability to do so. Id. at ¶¶ 6-7. As of today,
`August 25, 2023, OptoLum has no income and has no ability
`to generate income in the future. Id. at ¶ 8. OptoLum
`currently carries an accounts receivable balance of
`$7,209.45 that has been deemed uncollectable, and an
`accounts payable balance of $624,383.63. Id. at ¶¶ 9-10.
`If OptoLum were to incur additional debt, OptoLum has no
`ability to pay. Id. at 11.
`
`
`ME1 30291008v.1
`
`5
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 5 of 12
`
`
`
`In Giles, the court held that “[t]he record before the
`court amply supports the conclusion that plaintiff is of
`modest means and is unable to pay the assessed costs” and
`therefore found “that it would be "unjust or inequitable to
`enforce Fed. R. Civ. P. 54(d)(1) against [plaintiff].”
`Giles, 2020 U.S. Dist. LEXIS 31991, at *6-7. See also Levy
`v. Lexington Cnty., No. 3:03-3093-MB, 2012 WL 6675051, at
`*3 (D.S.C. Dec. 20, 2012) (*7) (denying $12,898.70 in costs
`and finding that the non-prevailing parties were of modest
`means where they earned $44,598 and $109,647 per year but
`carried $21,000 in debt).
`
`Additionally, and as noted by the Court at the close of
`trial, this case was a close one, hard fought by both
`parties, but even considering that Cree’s Bill of Costs is
`exorbitant and overblown, particularly considering that
`more than 75% of the reported costs are not properly
`taxable under this Court’s and the Clerk’s guidance.
`
`Given that OptoLum is no longer a going concern and has
`no ability to pay even the properly taxable costs, and
`considering the closeness of the case and Cree’s overreach
`in its request, OptoLum asks the Court to follow the
`6
`
`
`ME1 30291008v.1
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 6 of 12
`
`
`
`precedent in Giles, find that it would be unjust or
`inequitable to enforce Fed. R. Civ. P. 54(d)(1) against
`OptoLum, and disallow Cree’s Bill of Costs in its entirety.
`B. Cree’s Bill of Costs Must Be Reduced to Only Properly
`Taxable Costs
`While the Court has wide latitude to award costs, those
`costs must be of the sort enumerated in the general
`taxation-of-costs statute, 28 U.S.C. § 1920. See Crawford
`Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 442 (1987).
`Cree’s Bill of Costs requests taxation of over $68,000 of
`items not properly taxable under § 1920, as interpreted by
`L.R. 54 and explained by the Costs Guide.2
`
`1. Hearing transcripts and Rough Trial Transcripts
`Cree’s Bill of Costs includes $5,540.65 for the cost of
`transcripts for a hearing on a motion to strike, the pre-
`trial hearings, and the daily/rough trial transcripts. See
`Ex. A at 1. Only those transcripts “necessarily obtained
`for use in the case” are taxable, and “[t]he filing party
`must provide an explanation as to why the transcript was
`reasonably necessary.” Costs Guide at C(1). Cree has
`
`2 Attached hereto at Exhibit A are tables enumerating each of
`the objectionable costs, as will be explained in more
`detail below.
`7
`
`
`ME1 30291008v.1
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 7 of 12
`
`
`
`provided no such explanation. Furthermore, costs of daily
`transcript copies are generally not taxable by the clerk.
`See id. at C(4)(i). As Cree has provided no explanation as
`to why such transcripts were “necessarily obtained for use
`in the case” these costs should be disallowed.
`
`2. Deposition Transcripts for Witnesses Who Did Not Appear
`Cree’s Bill of Costs includes $13,198.83 for deposition
`transcripts of witnesses that did not testify at trial.
`These depositions were not entered into evidence or used as
`evidence in support of a motion that was case dispositive.
`See Ex. A at 2 (itemizing costs for the depositions of
`Watson, Edmond, Vollers, Athalye, Baldwin, Hill, Lenkszus,
`and Nelson); see also Costs Guide at C(2)(i)-(iii) (“the
`Clerk may tax deposition transcripts when: (i) The deponent
`testified at trial; (ii) The deposition was admitted into
`evidence; or (iii) The deposition was submitted in
`connection with an event that terminated the litigation
`(e.g., summary judgment).)” Therefore, these costs are not
`properly taxable and should be disallowed.
`
`3. Deposition Overcharges
`
`
`ME1 30291008v.1
`
`8
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 8 of 12
`
`
`
`In addition to including costs for depositions that
`were not used at trial, Cree has also included $18,799.32
`in costs incident to depositions that are not properly
`taxable, including videography (in addition to a printed
`transcript and which was not used at trial), ASCII files,
`additional copies and formats of the transcripts, and
`delivery fees. See Ex. A at 3 (detailing deposition
`overcharges for witnesses Scally, Swoboda, Negley, York,
`Garceran, Hunter, Steigerwald, McCreary, Baker, Safarikas,
`Progl, Bretschneider, and Dry); see also Costs Guide at
`C(3)-(4). These costs should be disallowed.
`
`
`
`4. Witnesses that Did Not Appear
`Cree’s Bill of Costs includes $255 for witness fees for
`witnesses that did not testify nor appear at trial. These
`fees are not taxable and should be disallowed. See Ex. A
`at 4 (detailing costs for non-testifying witnesses Baldwin,
`Athalye, and Edmond); see also Costs Guide at E(2)(iii).
`
`5. Copy and Printing Costs
`Cree’s Bill of Costs includes $830.43 for unidentified
`printing fees at Sage Patent Group, and $13,559.65 for
`9
`
`
`ME1 30291008v.1
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 9 of 12
`
`
`
`copies of trial exhibits. Because these printing charges
`are for unidentified items and the copies of trial exhibits
`were not filed with the clerk or courtesy copies for the
`court and were only for use by counsel, these costs should
`be disallowed. See Ex. A at 5 (itemizing costs for
`printing and copies); see also Costs Guide at G(1)-(3).
`
`6. Exemplification Costs
`Cree’s Bill of Costs includes $16,268.75 for the
`creation of trial graphics that Cree characterizes as
`“Exemplification Costs.” Ex. A. at 6. Exemplification
`costs “typically include the costs for producing a
`demonstrative aid as an exhibit.” Costs Guide at F
`(emphasis added). Here, however, the trial graphics
`included
`in
`Cree’s
`Bill
`of
`Costs
`were
`not
`“exemplifications” used as exhibits, but rather electronic
`power point presentations used while questioning witnesses
`and were not introduced as exhibits. Instead, the costs
`Cree identifies were for the time that a technician took to
`prepare the electronic files. These are not the type of
`costs typically allowable under § 1920. “Taxable costs are
`limited to relatively minor, incidental expenses as is
`
`
`ME1 30291008v.1
`
`10
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 10 of 12
`
`
`
`evident from § 1920, which lists such items as clerk fees,
`court reporter fees, expenses for printing and witnesses,
`expenses for exemplification and copies, docket fees, and
`compensation of court-appointed experts” and “nontaxable
`expenses [include] attorneys, experts, consultants, and
`investigators.” Taniguchi v. Kan Pacific Saipan Ltd. 566
`U.S. 560, 573 (2012); see also Onyx Therapeutics, Inc. v.
`CIPLA Ltd. et al., C.A. No. 16-988-GBW Memorandum Order at
`9 (D. Del. Feb. 17, 2023) (citing Taniguchi, and finding
`that “exemplification” under § 1920 “would not include the
`intellectual effort of consultants to prepare graphics for
`trial” and disallowing costs related to design, rather than
`production of physical exhibits.) Here, the costs Cree
`identifies as “exemplification” are in fact for the
`“design” of electronic graphics. See generally Dkt. No.
`391-4, Ex. 49 to Cree’s Bill of Cost (highlighting costs
`characterized as “Professional Fees” for “Communication
`Design” and “Presentation Design”). Therefore, these costs
`for “exemplification” should be disallowed.
`IV. CONCLUSION
`
`
`ME1 30291008v.1
`
`11
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 11 of 12
`
`
`
`For the forgoing reasons, given OptoLum’s inability to
`pay, the Court should disallow even properly taxable costs
`as inequitable and unjust, and DENY Cree’s Bill of Costs in
`its entirety. In the alternative, the Clerk should
`disallow at least $68,452.63 of the costs included in the
`Bill of Costs submitted by Defendant Cree.
`
`
`Dated: August 25, 2023
`
`
`
`
`ME1 30291008v.1
`
`By: /s/ Leah R. McCoy
` Leah R. McCoy
` MCCARTER & ENGLISH, LLP
` 265 Franklin Street
` Boston, MA 02110
` Telephone: (617) 449-6593
` Facsimile: (617)607-9200
` Email: lmccoy@mccarter.com
`
`
`By: /s/ Jacob S. Wharton
` Jacob S. Wharton
` NC State Bar No. 37421
` WOMBLE BOND DICKINSON (US)
`LLP
` One West 4th Street
` Winston-Salem, NC 27101
` Telephone: (336) 747-6609
` Facsimile: (336) 726-6985
` Email: Jacob.wharton@wbd-
`us.com
`
` Attorneys for Plaintiff
`OptoLum, Inc.
`
`12
`
`Case 1:17-cv-00687-WO-JLW Document 392 Filed 08/25/23 Page 12 of 12
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
