Case: 16-16832, 01/22/2018, ID: 10733949, DktEntry: 91, Page 1 of 60
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`
`
`Nos. 16-16832 & 16-16905
`_________________________
`IN THE UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`_________________________
`ORACLE USA, INC., a Colorado corporation;
`ORACLE AMERICA, INC., a Delaware corporation;
`ORACLE INTERNATIONAL CORPORATION, a California corporation,
`Plaintiffs-Appellees,
`
`v.
`RIMINI STREET, INC., a Nevada corporation; SETH RAVIN, an individual,
`Defendants-Appellants.
`_________________________
`On Appeal from the United States District Court
`For the District of Nevada (Hon. Larry R. Hicks)
`No. 2:10-cv-0106-LRH-VCF
`________________________
`
`PETITION FOR REHEARING EN BANC
`FOR APPELLANT RIMINI STREET, INC.
`_______________________
`
`
`
`
`
`
`
`
`
`
`
`
`
`Mark A. Perry
`Jeremy M. Christiansen
`GIBSON, DUNN & CRUTCHER LLP
`1050 Connecticut Avenue, N.W.
`Washington, D.C. 20036
`(202) 955-8500
`MPerry@gibsondunn.com
`
`
`Blaine H. Evanson
`Joseph A. Gorman
`Joseph C. Hansen
`GIBSON, DUNN & CRUTCHER LLP
`333 South Grand Avenue
`Los Angeles, California 90071
`(213) 229-7228
`
`
`
`BEvanson@gibsondunn.com
`
`
`Attorneys for Defendant-Appellant Rimini Street, Inc.
`
`
`
`
`

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`TABLE OF CONTENTS
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`Page
`RULE 35 STATEMENT ........................................................................................... 1
`BACKGROUND ....................................................................................................... 2
`ARGUMENT ............................................................................................................. 4
`I.
`REHEARING IS WARRANTED ON WHETHER NON-
`TAXABLE COSTS ARE AWARDABLE UNDER THE
`COPYRIGHT ACT ......................................................................................... 5
`REHEARING IS ALSO WARRANTED TO CLARIFY THE
`APPROPRIATE DATE FOR ESTABLISHING THE
`PREJUDGMENT INTEREST RATE IN COPYRIGHT CASES ................ 13
`CONCLUSION ........................................................................................................ 15
`
`
`II.
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`i
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`TABLE OF AUTHORITIES
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`Page(s)
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`Cases
`Arlington Century Sch. Dist. Bd. of Educ. v. Murphy,
`548 U.S. 291 (2006) .......................................................................................... 1, 9
`Artisan Contractors Ass’n of Am., Inc. v. Frontier Ins. Co.,
`275 F.3d 1038 (11th Cir. 2001) ........................................................................ 1, 6
`BMG Rights Mgmt. (US) LLC v. Cox Commc’ns, Inc.,
`No. 17-1353 (4th Cir.) (argued Oct. 25, 2017) ..................................................... 7
`Coles v. Wonder,
`283 F.3d 798 (6th Cir. 2002) ................................................................................ 8
`Crawford Fitting Co. v. J. T. Gibbons, Inc.,
`482 U.S. 437 (1987) .................................................................................... 1, 5, 11
`Dishman v. UNUM Life Ins. Co. of Am.,
`269 F.3d 974 (9th Cir. 2001) .............................................................................. 14
`InvesSys, Inc. v. McGraw-Hill Cos.,
`369 F.3d 16 (1st Cir. 2004) ................................................................................... 7
`Marx v. Gen. Revenue Corp.,
`568 U.S. 371 (2013) .................................................................................. 1, 10, 11
`Microsoft Corp. v. i4i Ltd. P’ship,
`564 U.S. 91 (2011) .............................................................................................. 10
`Petrella v. Metro-Goldwyn-Mayer, Inc.,
`134 S. Ct. 1962 (2014) ........................................................................................ 12
`Pinkham v. Camex, Inc.,
`84 F.3d 292 (8th Cir. 1996) .............................................................................. 1, 6
`Price v. Stevedoring Servs. of Am., Inc.,
`697 F.3d 820 (9th Cir. 2012) .............................................................................. 13
`Saavedra v. Korean Air Lines Co.,
`93 F.3d 547 (9th Cir. 1996) ................................................................................ 14
`
`ii
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`TABLE OF AUTHORITIES
`(continued)
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`Page(s)
`
`
`Sears, Roebuck & Co. v. Stiffel Co.,
`376 U.S. 225 (1964) ............................................................................................ 12
`Susan Wakeen Doll Co. v. Ashton Drake Galleries,
`272 F.3d 441 (7th Cir. 2001) ................................................................................ 7
`Taniguchi v. Kan Pac. Saipan, Ltd.,
`566 U.S. 560 (2012) ........................................................................................ 5, 11
`Tempest Publ’g, Inc. v. Hacienda Records & Recording Studio, Inc.,
`141 F. Supp. 3d 712 (S.D. Tex. 2015) ................................................................ 10
`Trader Joe’s Co. v. Hallatt,
`835 F.3d 960 (9th Cir. 2016) .............................................................................. 11
`Twentieth Century Fox Film Corp. v. Entm’t Distrib.,
` 429 F.3d 869 (9th Cir. 2005) ................................................................. 1, 6, 7, 10
`United States v. Lindsey,
`634 F.3d 541 (9th Cir. 2011) .............................................................................. 11
`W. Va. Univ. Hosps., Inc. v. Casey,
`499 U.S. 83 (1991) ........................................................................................ 1, 5, 8
`Constitutional Provisions
`U.S. Const. art. I, § 8, cl. 8 ......................................................................................... 8
`Statutes
`17 U.S.C. § 505 ................................................................................ 1, 4, 6, 7, 8, 9, 11
`28 U.S.C. § 1821 ................................................................................................ 5, 6, 8
`28 U.S.C. § 1920 ....................................................................... 3, 5, 6, 7, 8, 9, 10, 11
`28 U.S.C. § 1961 ...................................................................................................... 14
`42 U.S.C. § 1988 .................................................................................................... 8, 9
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`iii
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`TABLE OF AUTHORITIES
`(continued)
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`Page(s)
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`Pub. L. 94-559, 90 Stat. 2641 (Oct. 19, 1976) ........................................................... 8
`Rules
`Fed. R. App. P. 35(a) ................................................................................................. 1
`Fed. R. Civ. P. 54(d)(1) ............................................................................................ 10
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`RULE 35 STATEMENT
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`
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`Expressly announcing that it was “bound” by circuit precedent, the panel
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`upheld an award of over $12 million of non-taxable costs in this copyright
`
`infringement suit on the ground that the Copyright Act’s provision for “full costs”
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`(17 U.S.C. § 505) encompasses non-taxable costs. Op. 33 (citing Twentieth Century
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`Fox Film Corp. v. Entm’t Distrib., 429 F.3d 869 (9th Cir. 2005)). The Eighth and
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`Eleventh Circuits, in sharp contrast, have held that the same provision does not
`
`authorize non-taxable costs. Artisan Contractors Ass’n of Am., Inc. v. Frontier Ins.
`
`Co., 275 F.3d 1038, 1039–40 (11th Cir. 2001) (per curiam); Pinkham v. Camex, Inc.,
`
`84 F.3d 292, 295 (8th Cir. 1996). And a consistent line of Supreme Court precedent
`
`makes clear that this Court is on the wrong side of this circuit conflict. See Marx v.
`
`Gen. Revenue Corp., 568 U.S. 371, 377–86 (2013); Arlington Century Sch. Dist. Bd.
`
`of Educ. v. Murphy, 548 U.S. 291, 301–03 (2006); W. Va. Univ. Hosps., Inc. v.
`
`Casey, 499 U.S. 83, 86–87 (1991), superseded by statute, 42 U.S.C. § 1988;
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`Crawford Fitting Co. v. J. T. Gibbons, Inc., 482 U.S. 437, 445 (1987). This Court’s
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`outlier position on the awardability of non-taxable costs undermines the important
`
`policy of affording national uniformity to litigants in copyright cases. The en banc
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`Court should grant rehearing. Fed. R. App. P. 35(a).
`
`The panel’s decision also marks the first time that this Court has approved
`
`using a prejudgment interest rate that precedes the filing of the complaint in a
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`1
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`copyright case—a ruling that added $20 million to the judgment in this case. See
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`Op. 29. Rehearing is warranted to make clear that, as a matter of law, the filing of
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`the complaint in this case provides the earliest date for establishing the prejudgment
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`interest rate.
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`As to both non-taxable costs and prejudgment interest, the panel reached the
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`wrong result and, more importantly, set bad precedent for future copyright cases—
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`which already are disproportionately filed in this Circuit. These two errors of law
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`almost doubled a $35.6 million jury verdict for what the jury deemed innocent
`
`copyright infringement. And absent correction by the en banc Court, these errors
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`will be replicated, and amplified, in future litigation under the Copyright Act, in
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`open derogation of congressional intent.
`
`BACKGROUND
`
`Plaintiff-appellee Oracle USA, Inc. and its affiliates sued defendant-appellant
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`Rimini Street, Inc. and its CEO for copyright infringement and eleven other causes
`
`of action. Oracle licenses various proprietary enterprise software programs to its
`
`customers and then separately sells maintenance contracts for that software. Op. 5.
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`Rimini engages “in lawful competition with Oracle’s direct maintenance services,”
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`providing third-party support for Oracle’s PeopleSoft, J.D. Edwards, Siebel, and
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`Database products. Id. at 5–7.
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`2
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`Rimini began operations in 2006, and Oracle immediately began sending
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`letters threatening suit. See, e.g., ER192. In 2010, Oracle sued Rimini on its twelve
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`legal theories. See ER1523–44. After extensive discovery, motion practice, and a
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`four-week jury trial, Oracle abandoned or lost almost all of its claims against Rimini,
`
`ultimately obtaining a $35.6 million verdict holding Rimini liable for what the jury
`
`expressly found to have been innocent copyright infringement, and a $14.4 million
`
`verdict for violations of state computer hacking statutes. ER449, ER453, ER542–
`
`50, ER562.
`
`The district court then granted Oracle a raft of post-trial relief, including a
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`permanent injunction, over $28 million in attorneys’ fees, $5 million in taxable costs,
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`$12 million in non-taxable costs, and $22 million in prejudgment interest. These
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`orders inflated the final judgment to nearly $125 million. ER1–2.
`
`The panel affirmed the copyright infringement verdict on narrow grounds
`
`(Op. 7–22), but reversed the computer hacking verdict (id. at 22–26) and vacated the
`
`permanent injunction and attorneys’ fees award (id. at 29–31). As to the $12 million
`
`award of non-taxable costs, the panel acknowledged that 28 U.S.C. § 1920
`
`“identifies only six categories of costs that are taxable,” but held that it was “bound
`
`by [circuit] precedent” to approve the district court’s award of costs not specified in
`
`the statute. Op. 33 (citing Twentieth Century Fox). The panel also approved the
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`district court’s use of the prevailing interest rate at the date infringement began (in
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`3
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`2006) to calculate prejudgment interest, on the theory that the jury awarded
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`infringement damages in the form of a hypothetical license and Oracle “lost” the
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`benefit of those license fees from the outset. Id. at 29. The result was an interest
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`rate many multiples higher than the rate in effect at either the filing of the complaint
`
`or the entry of judgment (see ER1871):
`
`Date
`Beginning of Infringement (2006)
`Filing of Complaint (2010)
`Entry of Judgment (2016)
`
`Rate
`5.07%
`0.35%
`0.61%
`
`Amount
`$22,691,741.52
`~ $1,400,000.00
`$2,416,437.88
`
`As a result, Oracle received a windfall of more than $20 million.
`
`ARGUMENT
`
`The Court should grant the petition to correct two errors of exceptional
`
`importance. First, this Court is on the minority side of a circuit split regarding
`
`whether non-taxable costs are recoverable under Section 505 of the Copyright Act,
`
`and its approach is irreconcilable with Supreme Court precedent. Second, the panel
`
`permitted a prejudgment interest award to be set using an interest rate that predates
`
`the litigation itself. These errors inflated the judgment by more than $30 million—
`
`almost doubling the jury’s verdict—and will encourage future litigants to file
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`copyright suits in this Circuit to obtain monetary relief not available in other
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`jurisdictions. The Court should grant the petition for en banc rehearing.
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`4
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`I.
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`REHEARING IS WARRANTED ON WHETHER NON-TAXABLE
`COSTS ARE AWARDABLE UNDER THE COPYRIGHT ACT
`
`Since the mid-nineteenth century, Congress has expressed a staunch
`
`preference for uniformity as to recoverable costs in commercial litigation. From
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`1799 to 1853, federal courts relied on a patchwork of state statutes to tax costs
`
`against a losing party, which caused “great diversity in practice among the courts”
`
`as to what types of costs could be taxed, and resulted in “losing litigants … being
`
`unfairly saddled with exorbitant fees.” Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S.
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`560, 565 (2012). Recognizing the dire need “for a uniform federal rule” regarding
`
`taxable costs (id.), Congress “comprehensively regulated fees and the taxation of
`
`fees as costs in the federal courts” through the Fee Act, codified now at 28 U.S.C.
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`§§ 1920 and 1821 (Crawford Fitting, 482 U.S. at 440 (emphasis added)).
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`Sections 1920 and 1821 of the Judicial Code “embod[y] Congress’ considered
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`choice as to the kinds of expenses that a federal court may tax as costs against the
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`losing party.” Id. (emphasis added); see also Taniguchi, 566 U.S. at 565. “[T]hese
`
`provisions define the full extent of a federal court’s power to shift litigation costs
`
`absent express statutory authority to go further.” Casey, 499 U.S. at 86.
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`Under Section 1920, only a discrete category of litigation costs is recoverable.
`
`These costs, known as taxable costs, include expenses such as court fees and modest
`
`witness trial attendance fees. See 28 U.S.C. § 1920. Section 1821, in turn, provides
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`rate limitations for various costs in Section 1920. 28 U.S.C. § 1821(a)–(f).
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`5
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`A. The Copyright Act provides that “the court in its discretion may allow
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`the recovery of full costs by or against any party other than the United States or an
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`officer thereof.” 17 U.S.C. § 505. Although this Court has held that the word “full”
`
`in this provision authorizes the award of non-taxable costs (see Twentieth Century
`
`Fox, 429 F.3d at 885), the Eighth and Eleventh Circuits have squarely held that this
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`same language does not authorize the recovery of non-taxable costs.
`
`In Pinkham, the Eighth Circuit held that costs under the Copyright Act are
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`limited to the categories “expressly identified” in Section 1920 and the
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`accompanying rate limitations imposed by Section 1821. 84 F.3d at 295. The court
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`reasoned that the words “full costs” did not “‘clearly,’ ‘explicitly,’ or ‘plainly,’
`
`evidence[] congressional intent to treat 17 U.S.C. § 505 costs differently from costs
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`authorized in other statutes.” Id. (relying on Crawford Fitting and Casey).
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`In Artisan Contractors, the Eleventh Circuit expressly adopted Pinkham’s
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`approach: “Section 505 makes no clear reference to witness fees, nor otherwise
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`evinces a clear congressional intent to supersede the limitations imposed” by
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`Congress’s comprehensive cost-shifting regime. 275 F.3d at 1039–40.
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`In Twentieth Century Fox, a panel of this Court created a conflict with the
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`Eighth and Eleventh circuits by concluding summarily that “there can be no other
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`import to the phrase ‘full costs’ within § 505” besides overriding Section 1920’s cost
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`categories. 429 F.3d at 885. According to Twentieth Century Fox, “[c]onstruing
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`§ 505 as limiting the costs that may be awarded to any particular subset of taxable
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`costs effectively reads the word ‘full’ out of the statute,” thus “violat[ing] the long
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`standing principle of statute interpretation that statutes should not be construed to
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`make surplusage of any provision.” Id. (internal quotation marks omitted).
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`The panel here noted that “relying expressly on Twentieth Century Fox, the
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`district court awarded Oracle $12,774,550.26 in non-taxable costs.” Op. 33. The
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`panel affirmed the district court’s award, explaining in no uncertain terms that “[w]e
`
`are bound by our precedent”—specifically, “[o]ur decision in Twentieth Century
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`Fox[, which] concerned the relationship between 17 U.S.C. § 505 and 28 U.S.C.
`
`§ 1920.” Op. 33 (emphasis added). On that basis alone, the panel affirmed the award
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`of non-taxable costs. Id.
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`The Fourth Circuit is currently considering the identical issue in an appeal that
`
`has been fully briefed and argued, but not yet decided. See BMG Rights Mgmt. (US)
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`LLC v. Cox Commc’ns, Inc., No. 17-1353 (4th Cir.) (argued Oct. 25, 2017). The
`
`First and Seventh Circuits have acknowledged, but not decided, the issue. See
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`InvesSys, Inc. v. McGraw-Hill Cos., 369 F.3d 16, 22–23 (1st Cir. 2004) (holding that
`
`electronic legal research is part of “attorneys’ fees” under Section 505); Susan
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`Wakeen Doll Co. v. Ashton Drake Galleries, 272 F.3d 441, 458 (7th Cir. 2001)
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`(holding that district court “erred in awarding attorney’s fees as ‘costs’ under 28
`
`U.S.C. § 1920” in copyright case). The Sixth Circuit, as this Court noted in
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`7
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`Twentieth Century Fox, has affirmed an award of non-taxable costs, but without
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`recognition or discussion of the issue. Coles v. Wonder, 283 F.3d 798, 803 (6th Cir.
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`2002).
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`The 2-1 conflict among the federal courts of appeals on the availability of non-
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`taxable costs under the Copyright Act is sufficient reason alone to grant rehearing
`
`en banc. As explained further below, nationwide litigation should be governed by
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`uniform rules as to issues that arise in every case tried to judgment.
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`B. This Court’s position on the minority side of an open circuit conflict
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`also contradicts Supreme Court precedent concerning the availability of non-taxable
`
`costs, including two decisions reached after Twentieth Century Fox.
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`In Casey, the Supreme Court held that expert fees were not recoverable as a
`
`part of attorneys’ fees and costs under an earlier version of 42 U.S.C. § 1988. 499
`
`U.S. at 88. Section 1988 did not contain any provision “referring explicitly” to
`
`categories of costs beyond Sections 1920 and 1821, unlike numerous statutes
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`enacted “[i]n 1976, just over a week prior” to the then-version of Section 1988. Id.
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`at 87–88. Those statutes, unlike Section 1988, expressly shifted expert fees. Id.
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`at 88. The Court took this as powerful evidence that Congress knew how to provide
`
`for cost categories beyond those in Section 1920. Id. Section 505 of the Copyright
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`Act was passed the same day and as part of the same public law as that version of
`
`Section 1988. Compare Pub. L. 94-559, 90 Stat. 2641 (Oct. 19, 1976) (42 U.S.C.
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`8
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`§ 1988), with id. § 101, 90 Stat. 2586 (17 U.S.C. § 505). The reasoning of Casey,
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`therefore, applies with particular force to the Copyright Act, which like the earlier
`
`version of Section 1988, does not specify any additional categories of recoverable
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`costs.
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`In Murphy, which post-dates Twentieth Century Fox, the Supreme Court
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`clarified that “no statute” can “be construed as authorizing the taxation of witness
`
`fees as costs unless the statute refers explicitly to witness fees.” 548 U.S. at 301
`
`(emphases added) (internal quotation marks omitted). In other words, Crawford
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`Fitting’s requirement that there must be “explicit statutory authorization” to recover
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`non-taxable costs means that the statute must specify the recoverable categories of
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`non-taxable costs. Id.
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`The panel’s decision cannot be reconciled with Murphy, which repeatedly
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`emphasized the need for explicit statutory authority. See id. at 295, 298, 301, 303.
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`There is no specific and explicit category of costs outside of Section 1920’s scope
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`that the Copyright Act authorizes. And the word “full” in Section 1920 is not nearly
`
`explicit enough to expand the scope of recoverable costs. Thus, even if the Twentieth
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`Century Fox approach could be reconciled with Casey, it did not survive Murphy.
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`The Supreme Court’s ensuing decision in Marx removes any doubt that this
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`Court’s conclusory decision in Twentieth Century Fox was erroneous. In Marx, the
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`Court addressed whether the Fair Debt Collection Practices Act (“FDCPA”)’s
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`language providing for the award of reasonable attorneys’ fees “and costs” in bad
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`faith litigation displaced Federal Rule of Civil Procedure 54(d)’s “presumption that
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`prevailing parties are entitled to costs.” 568 U.S. at 377. Rule 54 authorizes costs—
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`those delineated in Section 1920—“unless a federal statute … provides otherwise.”
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`Fed. R. Civ. P. 54(d)(1). The Court held that the FDCPA does not provide otherwise,
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`but was meant only to “remov[e] any doubt that defendants may recover costs as
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`well as attorney’s fees when plaintiffs bring suits in bad faith.” 568 U.S. at 383. In
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`responding to the argument that its holding rendered the FDCPA’s “and costs”
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`language “superfluous,” the Court cited nine federal statutes that “overlap with Rule
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`54(d)(1),” concluding that “redundancy is ‘hardly unusual’ in statutes addressing
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`costs.” Id. at 385 (quoting Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91, 107
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`(2011)).
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`The Supreme Court, therefore, held that the canon against surplusage was not
`
`compelling in interpreting costs statutes. That holding is significant because the
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`entire premise of Twentieth Century Fox is that the word “full,” if limited to Section
`
`1920, might otherwise be redundant with “costs.” 429 F.3d at 885. As one court
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`rightly observed, with considerable understatement, Marx “casts some doubt on
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`[Twentieth Century Fox’s] logic.” Tempest Publ’g, Inc. v. Hacienda Records &
`
`Recording Studio, Inc., 141 F. Supp. 3d 712, 723 (S.D. Tex. 2015).
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`10
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`The panel here thought that Marx did not abrogate Twentieth Century Fox
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`because it did not directly involve either the Copyright Act or Section 1920. Op. 33.
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`But the Copyright Act uses language very similar to the statutes cited in Marx.
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`Compare 568 U.S. at 385, with 17 U.S.C. § 505. And, critically, the Supreme
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`Court’s overriding concern in Crawford Fitting and other cases is that cost statutes
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`be construed “in pari materia.” 482 U.S. at 445. Thus, Marx’s holding bears
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`directly on analyzing the Copyright Act’s limited authority to recover costs. E.g.,
`
`Trader Joe’s Co. v. Hallatt, 835 F.3d 960, 967 n.4 (9th Cir. 2016) (analyzing
`
`Supreme Court’s reasoning to determine whether intervening decision undid panel
`
`precedent); United States v. Lindsey, 634 F.3d 541, 548, 550 (9th Cir. 2011) (same).
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`The Supreme Court’s reasoning in Marx and other cases make clear that non-taxable
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`costs are not awardable under the Copyright Act, and warrant overruling Twentieth
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`Century Fox.
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`C. This is an exceptionally important issue because the outlier approach
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`adopted in Twentieth Century Fox contravenes the core policy of national uniformity
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`underlying federal taxable costs and Copyright Act litigation.
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`Throughout the decades of Supreme Court decisions on recoverable costs, the
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`Court has consistently reiterated the need for nationwide uniformity. See, e.g.,
`
`Taniguchi, 566 U.S. at 565 (stating that Congress sought “a uniform federal rule” on
`
`recoverable costs); Crawford Fitting, 482 U.S. at 440, 444 (explaining that
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`11
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`“Congress meant to impose rigid controls on cost-shifting in federal courts” to do
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`away with the “great diversity in practice among the courts” that previously existed).
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`The same is true of litigation under federal copyright laws: The Constitution gives
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`Congress the ability to grant copyrights (U.S. Const. art. I, § 8, cl. 8), precisely
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`because the States were viewed as unable to “make effectual provisions” for them,
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`in large part due to the inherent lack of uniformity in state law (The Federalist No.
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`43 at 268 (Madison) (Rossiter ed., 1961)). The Supreme Court has long recognized
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`the “purpose of Congress to have national uniformity in … copyright laws.” Sears,
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`Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 231 n.7 (1964).
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`The panel’s decision is in direct conflict with this policy. To put it simply:
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`Rimini was ordered to pay $12 million of non-taxable costs it would not have had to
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`pay in other jurisdictions. The panel’s decision opens the floodgates to excessive
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`costs, like the eight-digit award in this case, and creates unequal and unfair
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`incentives to pursue copyright infringement cases in this Circuit. It destroys “the
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`uniformity Congress sought to achieve” under the Copyright Act. Petrella v. Metro-
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`Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1975 (2014). It is not tolerable that litigants
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`in the Eighth and Eleventh Circuits are subject to one regime while litigants in the
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`Ninth Circuit are subject to a completely contrary rule—only one or the other can be
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`correct. In light of intervening Supreme Court precedent, Twentieth Century Fox is
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`wrong and should be overruled.
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`12
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`* * *
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`This Court’s current approach to non-taxable costs under the Copyright Act
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`directly and irreconcilably conflicts with the decisions of the other two appellate
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`courts that have considered the identical issue. This Court’s minority approach also
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`runs counter to a long line of Supreme Court precedent disallowing non-taxable costs
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`in the absence of express statutory authorization, which the Copyright Act does not
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`contain. In an area of law doubly intended to be nationally uniform, the Court’s
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`aberrational approach reinstates the very problems Congress set out to avoid more
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`than a century ago. This Court should grant the petition for rehearing and address
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`this exceptional and recurrent problem by correcting the error made in Twentieth
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`Century Fox and ruling that non-taxable costs are not awardable under the Copyright
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`Act.
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`II. REHEARING
`IS ALSO WARRANTED TO CLARIFY THE
`APPROPRIATE DATE FOR ESTABLISHING THE PREJUDGMENT
`INTEREST RATE IN COPYRIGHT CASES
`
`The Court should also rehear the panel’s affirmance of a $22 million
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`prejudgment interest award, which resulted in a $20 million windfall to Oracle. This
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`Court has squarely held that the presumptive date for setting the prejudgment interest
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`rate is the week preceding the entry of judgment, by reference to the post-judgment
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`interest statute. See Price v. Stevedoring Servs. of Am., Inc., 697 F.3d 820, 836 (9th
`
`13
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` Case: 16-16832, 01/22/2018, ID: 10733949, DktEntry: 91, Page 19 of 60
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`
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`Cir. 2012) (en banc); Saavedra v. Korean Air Lines Co., 93 F.3d 547, 555 (9th Cir.
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`1996); see also 28 U.S.C. § 1961.
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`The district court departed from the presumptive statutory rate and used the
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`prevailing rate at the date infringement allegedly began, citing two reasons: (1) “the
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`nature of the jury’s award of hypothetical license damages,” and (2) Rimini
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`supposedly “engaged in discovery delays and other litigation tactics ... that kept this
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`action in litigation for several years.” ER22. The panel correctly recognized that
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`the latter reason is insufficient as a matter of law: “Rimini is correct that it would
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`have been improper for the district court to set a higher rate based on Rimini’s
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`litigation conduct alone.” Op. 29; see Dishman v. UNUM Life Ins. Co. of Am., 269
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`F.3d 974, 988 (9th Cir. 2001). But the panel nonetheless affirmed the prejudgment
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`interest award.
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`In doing so, the panel ruled that “[i]t is apparent that the rate was based
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`primarily on the jury’s award of copyright damages based on a hypothetical license,
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`making it appropriate to approximate the licensing fees that Oracle ‘lost out on’ and
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`‘would have received, absent infringement’ by using the Treasury rate at the date of
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`infringement.” Op. 29.
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`As a matter of law, however, the prejudgment interest rate cannot be set using
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`a date that precedes the filing of Oracle’s complaint. Oracle was aware of the
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`allegedly infringing activities from the moment Rimini Street opened for business
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`14
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`in 2006. Oracle sent a series of threatening letters, made public statements, and
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`conducted extensive internal analyses. E.g., ER192. Yet for reasons known only to
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`itself, Oracle chose not to file this lawsuit until 2010. ER13. Oracle itself has taken
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`the position that the jury’s award of hypothetical license damages “do[es] not
`
`account for the reality that Oracle would not have licensed Rimini on the [same]
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`terms.” Oracle Br. 41 (Dkt. 50). Because the hypothetical license is a consequence
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`(and an artifact) of the lawsuit, Oracle did not “los[e] out on” anything that pre-dates
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`the filing of the complaint. Therefore, as a matter of both law and equity, the earliest
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`date for the prejudgment interest rate is the date on which the complaint was filed.
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`No decision from this Court has ever countenanced an award of prejudgment
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`interest in a copyright case that preceded the date of the complaint. The decision to
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`break new ground here was unlawful, inequitable, and unjust. As with the non-
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`taxable costs issue, the ruling may have a distortive effect on future litigation by
`
`providing an incentive to file suit in this Circuit. The en banc Court should correct
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`this error and set constraints on this exceptionally important issue to avoid such
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`unfair windfalls to future litigants.
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`CONCLUSION
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`The Court should grant rehearing en banc.
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`15
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` Case: 16-16832, 01/22/2018, ID: 10733949, DktEntry: 91, Page 21 of 60
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`
`Dated: January 22, 2018
`
`
`
`
`
`
`
`
`Blaine H. Evanson
`Joseph A. Gorman
`Joseph C. Hansen
`GIBSON, DUNN & CRUTCHER LLP
`333 South Grand Avenue
`Los Angeles, California 90071
`(213) 229-7228
`
`
`
`BEvanson@gibsondunn.com
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted.
`
`s/ Mark A. Perry .
`
`Mark A. Perry
`Jeremy M. Christiansen
`GIBSON, DUNN & CRUTCHER LLP
`1050 Connecticut Avenue, N.W.
`Washington, D.C. 20036
`(202) 955-8500
`MPerry@gibsondunn.com
`
`Attorneys for Defendant-Appellant Rimini Street, Inc.
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`16
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` Case: 16-16832, 01/22/2018, ID: 10733949, DktEntry: 91, Page 22 of 60
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`STATEMENT OF RELATED CASES
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`Pursuant to Circuit Rule 28-2.6, counsel hereby states that the two
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`consolidated matters in this appeal (Case No. 16-16832 & Case No. 16-16905) are
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`the only related cases pending before this Court.
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`
`
`Dated: January 22, 2018
`
`
`
`
`
`
`
`s/ Mark A. Perry .
`Mark A. Perry
`
`
`
`
`
`
`
`

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` Case: 16-16832, 01/22/2018, ID: 10733949, DktEntry: 91, Page 23 of 60
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`CERTIFICATE OF COMPLIANCE
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`I certify that this brief complies with the type-volume limitation of Ninth
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`Circuit Rule Circuit Rules 35-4 and 40-1 because it contains 3,570 words, excluding
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`the parts of the brief exempted by Federal Rule of Appellate Procedure 32(f).
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`I certify that this brief complies with the typeface requirements of Federal
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`Rule of Appellate Procedure 32(a)(5) and the type style requir