Split Pivot, Inc. v. Trek Bicycle Corp., 154 F. Supp. 3d 769

Background

Split Pivot sued Trek for patent infringement; summary judgment and Federal Circuit affirmance found no infringement. Clerk taxed costs to Split Pivot; Trek sought $318,033.46.
Clerk awarded $265,535.92 but disallowed certain items (deposition exhibits book, bicycles used as trial exemplars, some e-discovery/vendor charges) and allowed most other claimed costs.
Split Pivot objected to the clerk’s award and sought indigency relief and/or a stay of enforcement; Trek opposed.
Major contested categories: deposition/video costs and related transcript/incidental fees; document copying (number of sets); and a large e-discovery bill (~$225,180).
The court applied Rule 54(d) presumption in favor of awarding costs, considered Seventh Circuit guidance on indigency for corporations, and adopted a narrow approach to taxable ESI costs consistent with Race Tires and related authority, but allowed metadata and hard-drive imaging per CBT Flint and Colosi.
Final result: court reduced the clerk’s award by $225,082.73 and directed amended costs of $40,453.09 for Trek; denied Split Pivot’s stay request.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Indigency of corporate loser	Split Pivot claimed inability to pay; asked to avoid or stay costs.	Trek argued corporate indigency is not a basis to avoid costs; collection belongs to bankruptcy process.	Denied; corporate indigency not a basis to refuse costs now; no indefinite stay.
Video-recording deposition costs	Video costs should be disallowed except for witnesses shown to be unavailable (only Auger).	Video costs recoverable under Little when transcripts necessarily obtained; tapes used to ensure completeness and highlight testimony.	Allowed; no blanket rule excluding domestic witness videos; Trek showed videotaped depositions were noticed and necessary.
Incidental deposition fees (rough drafts, expedited transcripts, shipping)	These incidental costs are not taxable or not shown reasonably necessary.	Such incidental costs are recoverable when necessary for complex litigation and court schedules.	Allowed in large part; rough/expedited transcripts and reporter/delivery fees were reasonable given complexity and schedule.
Copying costs & multiple sets	Copies excessive (many “for team” sets); some invoices unsupported; costs tied to dismissed counts should be excluded.	Trek provided adequate records; many invoices related to patent claims; impractical to segregate costs precisely.	Reduced copies exceeding four sets to reasonable level and made a small proportional reduction for costs possibly tied to dismissed counts (used deposition ratio).
E-discovery/vendor fees	Split Pivot urged Race Tires narrow rule limiting taxable ESI costs to scanning, native->TIFF conversion, and similar minimal items; challenged broad vendor charges.	Trek sought broad recovery of e-discovery charges as necessary.	Court adopted Race Tires approach (narrow view) but allowed costs for TIFF/native conversion, Bates-stamping, shipping, metadata and hard-drive imaging per CBT Flint and Colosi; reduced e-discovery award substantially.

Key Cases Cited

Little v. Mitsubishi Motors North America, Inc., 514 F.3d 699 (7th Cir. 2008) (videotaped deposition and reporter costs taxable when transcripts necessarily obtained)
McGill v. Faulkner, 18 F.3d 456 (7th Cir. 1994) (presumption in favor of taxing costs to prevailing party)
Krocka v. City of Chicago, 203 F.3d 507 (7th Cir. 2000) (district court must explain good reasons to deny costs)
Fehribach v. Ernst & Young LLP, 493 F.3d 905 (7th Cir. 2007) (corporate indigency generally not a basis to avoid taxing costs)
Haroco, Inc. v. American Nat'l Bank & Trust Co. of Chicago, 38 F.3d 1429 (7th Cir. 1994) (copy costs taxable)
Kulumani v. Blue Cross Blue Shield Ass'n, 224 F.3d 681 (7th Cir. 2000) (two sets of copies sensible; many sets for convenience less justifiable)
Race Tires America, Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158 (3d Cir. 2012) (narrow rule: taxable ESI costs limited to conversion/scanning/formatting for production)
CBT Flint Partners, LLC v. Return Path, Inc., 737 F.3d 1320 (Fed. Cir. 2013) (ELSI costs limited; allowed conversion/imaging/metadata extraction when necessary)
Country Vintner of N.C., LLC v. E. & J. Gallo Winery, 718 F.3d 249 (4th Cir. 2013) (endorsed Race Tires narrow approach to ESI costs)
Colosi v. Jones Lang LaSalle Americas, Inc., 781 F.3d 293 (6th Cir. 2015) (imaging hard drives is a taxable copy cost when necessarily obtained)
Finchum v. Ford Motor Co., 57 F.3d 526 (7th Cir. 1995) (incidental deposition expenses may be taxable)