Federal Court Awards $3M to Prevailing Defendants for Predictive Coding Expenses

A California District Court awarded a whopping $12.4 million in fees to a prevailing defendant, including $3 million in e-discovery costs and fees. In Gabriel Tech. Corp. v. Qualcomm Inc., 2013 WL 410103 (S.D. Cal. Feb. 1, 2013), a trade secret case, the court held that defendant was entitled to its fees under both 35 U.S.C. §285 and §3426.4 of California's Uniform Trade Secrets Act.

The court's $12.4 million fee award was rooted in its finding that "the plaintiffs knew they lacked the requisite evidence," but brought and pursued their frivolous claims anyway. Of the $12.4 million fee award to the prevailing defendant, the court awarded more than $3 million for costs associated with e-discovery, namely predictive coding services – a technique utilized by counsel for defendants. In the court's words, the predictive coding fees were "computer assisted, algorithm-driven document review" for which defendant was entitled to recovery as the prevailing party.