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Kwan Software Engineering, Inc. v. Foray Technologies, LLC

United States District Court, N.D. California

May 8, 2014

KWAN SOFTWARE ENGINEERING, INC., a California corporation, d/b/a Veripic, Inc., Plaintiff,
v.
FORAY TECHNOLOGIES, LLC, a Delaware limited liability company, Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR REVIEW OF THE CLERK'S TAXATION OF COSTS

SUSAN ILLSTON, District Judge.

A motion by plaintiff Kwan Software Engineering, Inc. d/b/a Veripic, Inc. ("Veripic") for review of the Clerk's taxation of costs pursuant to Federal Rule of Civil Procedure 54(d) is scheduled to be heard on May 9, 2014. Pursuant to Civil Local Rule 7-1(b), the Court determines that this matter is appropriate for resolution without oral argument and VACATES the hearing. For the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART Veripic's motion.

BACKGROUND

Veripic is a California corporation which provides digital-evidence related software to police and fire departments, as well as to other entities that need to store and retrieve photos, video, and audio files. First Amended Complaint ("FAC") ¶ 1, 7, 9. Veripic and defendant Foray Technologies, LLC ("Foray") are direct competitors in the digital asset management software market, which mainly consists of law enforcement agencies. Id. ¶ 9.

Veripic produces and sells the "Digital Photo Lab" ("DPL") software, which is "a centerpiece of its digital evidence management suite designed for law enforcement agencies." FAC ¶ 8. One of the "most popular" features of Veripic's DPL software is the "Calibration Module, " which permits users to measure the real life length of objects (in inches or metric units) or distances between objects in a photo using a "simple point and click." Id. ¶ 10. As a result, users can know the precise distances within photos and accurately print life-size or scaled images. Id. ¶ 11.

Foray produces and sells the "Authenticated Digital Asset Management System" ("ADAMS") software to the same customer base as Veripic targets with its DPL software.[1] Id. ¶ 9. Foray's ADAMS software has an "Image Calibration Utility" that performs substantially the same function as Veripic's "Calibration Module" - to allow users to accurately abstract real-life distance from a photo. Id. ¶ 15-16. Veripic contents that, until July 2009, Foray's Utility did so in a more "cumbersome" way than Veripic's "simple point and click" method. Id.

In addition, the ADAMS software employs a "hash function, " which allows the user to validate whether a piece of digital evidence has been manipulated or altered between the time it is entered into the ADAMS software system and a later time when a user wishes to make use of that piece of digital evidence. Id. ¶ 32. Veripic's DPL software has technology that allows the user to validate not only whether digital evidence has been altered since it was entered, but also whether the digital evidence has been altered from the moment the picture was originally taken.

On July 18, 2012, Veripic filed a complaint against Foray. On July 30, 2012, Veripic filed a first amended complaint, alleging causes of action for: (1) copyright infringement; (2) inducement of breach of contract; (3) contributory and induced copyright infringement; (4) violation of the Digital Millennium Copyright Act, 17 U.S.C. § 1201 et seq.; (5) false advertising and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a); (6) violation of California's False Advertising Law ("FAL"), California Business and Professions Code § 17500 et seq.; and (7) violation of California's Unfair Competition Law ("UCL"), California Business and Professions Code § 17200 et seq. Docket No. 4, FAC.

On February 11, 2014, the Court granted Foray's motion for summary judgment of all of Veripic's claims and entered judgment in the action in favor of Foray and against Veripic. Docket Nos. 153. 154. On February 25, 2014, Foray submitted its bill of costs. Docket No. 155. On March 19, 2014, the Clerk awarded Foray costs in the amount of $88, 848.13.[2] Docket No. 164. In awarding costs, the Clerk disallowed: (1) $105.13 in requested costs for service of summons and subpoena; (2) $5, 744.16 in requested costs for printed or electronically recorded transcripts necessarily obtained for use in the case; (3) $1, 591.79 in requested costs for witness fees; and (4) $5.00 in requested costs for docket fees under 28 U.S.C. § 1923. Id.

By the present motion, Veripic moves for the Court to review the Clerk's taxation of costs against it. Docket No. 171, Pl.'s Mot. Specifically, Veripic argues that the Clerk should have disallowed: (1) $453.29 in costs for service of summons and subpoena; (2) $6, 818.54 in costs for printed or electronically recorded transcripts; and (3) $61, 312 in costs for exemplification and the costs of making copies. Id.

LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 54(d), costs incurred by the prevailing party may be assessed against the losing party as of course and may be taxed by the clerk. "Unless 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 rule creates a presumption in favor of awarding costs to a prevailing party, but vests in the district court discretion to refuse to award costs. Association of Mexican-American Educators v. Cal., 231 F.3d 572, 591 (9th Cir. 2000) (citing National Info. Servs. Inc. v. TRW, Inc., 51 F.3d 1470, 1471 (9th Cir. 1995)).

28 U.S.C. § 1920 "enumerates the expenses that a federal court may tax as a cost under the discretionary authority found in Rule 54(d)." Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441-42 (1987). ...


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