August 01, 2025|Franchise Frontlines
August 1, 2025 | U.S. District Court for the Southern District of Florida | Report and Recommendation
Executive Summary
In a post-trial proceeding arising from a long-running multidistrict patent litigation, a magistrate judge recommended that Kona Ice recover $8,914.22 in taxable costs from Tikiz Franchising following a jury verdict of willful infringement under Kona’s liquid-toppings-dispensing patent. According to the opinion, Tikiz sought a declaratory judgment in 2018 after Kona asserted that Tikiz and its franchisees infringed Kona’s patented dispensing system. The case was later consolidated into an MDL that addressed liability and validity issues across numerous related actions filed nationwide. After the MDL court granted summary judgment in Kona’s favor on infringement and validity, the Florida court held a jury trial on damages and willfulness, resulting in an award of reasonable royalties and a finding of willful infringement. Kona then sought to recover litigation costs under Rule 54. The court recommended granting some, but not all, of the requested costs, focusing on which expenses were appropriately incurred “in this action” as opposed to the broader MDL.
Relevant Background
As recounted in the report, Kona asserted in the MDL that Tikiz and several Tikiz franchisees infringed Kona’s patent relating to a system for dispensing liquid toppings from the exterior of a motor vehicle used to serve frozen confections. The MDL consolidated more than a dozen infringement cases filed by Kona across different jurisdictions. Tikiz initiated this separate Florida action for declaratory judgment while those suits were pending, seeking rulings related to Kona’s claims.
The MDL court granted summary judgment in Kona’s favor, finding that Tikiz infringed the patent, that the patent remained valid and enforceable, and that Tikiz’s equitable defenses failed. At the parties’ joint request, the Florida court lifted the stay to adjudicate the remaining issues of monetary damages, willfulness, and any potential post-trial remedies. A two-day jury trial followed in June 2024. The jury awarded Kona $532,905 in reasonable royalties and found that Tikiz’s infringement was willful. Post-trial, the court granted Kona’s motion for enhanced damages and denied Tikiz’s renewed motion for judgment as a matter of law and for a new trial.
Following that ruling, Kona submitted a bill of costs as the prevailing party. Tikiz opposed portions of the request, arguing that some of Kona’s claimed costs were incurred in the MDL proceedings rather than in this specific action and therefore were not recoverable under Rule 54. The court’s report addressed each category of claimed costs and identified which expenses were appropriate for taxation.
Decision
The opinion begins by explaining the governing standard: Rule 54(d) creates a strong presumption that a prevailing party may recover taxable costs, but the costs must fall within the categories defined by 28 U.S.C. § 1920. The court first determined that Kona was unquestionably the prevailing party in this case following the jury verdict and post-trial order awarding enhanced damages.
The court then examined Kona’s request for filing fees and service costs for fourteen separate lawsuits that Kona filed against individual operators in their home jurisdictions—lawsuits that were later consolidated into the MDL. The court noted that Rule 54 authorizes cost awards only for the case in which they are sought. According to the opinion, the record reflected that those separate MDL actions remained pending, and Kona had not obtained final judgment in those matters. The court recommended denying recovery of those filing and service costs because they did not arise in the Florida action and were not tied to any final judgment in the consolidated cases.
The court next addressed Kona’s request for hearing-transcript costs from a 2019 Markman proceeding. The opinion notes that Kona relied on the transcript throughout the MDL and in this action, including for claim-construction issues that influenced summary-judgment briefing and post-trial motions. Because the transcript was reasonably necessary for use in this case, the court recommended awarding the requested amount.
Kona also sought reimbursement for daily trial transcripts. The court explained that daily transcripts are not automatically taxable but may be awarded when necessary for post-trial briefing. Kona argued that it relied on the transcripts for its motions regarding enhanced damages and prejudgment and post-judgment interest. Tikiz did not contest the necessity of the transcripts. The court therefore recommended awarding the full amount requested.
The report also addressed Kona’s request for costs associated with video-recorded depositions. Tikiz argued that the videos were not played at trial and that certain line-item expenses, such as processing fees, were incurred for convenience. Kona agreed to remove those line-items. The court concluded that video-recording costs were taxable because the depositions were reasonably necessary when taken and no evidence suggested they were unrelated to the issues in the case. The court recommended partial recovery consistent with Kona’s voluntary reduction.
Finally, the court evaluated Kona’s request for witness fees and subsistence allowances. The opinion states that two witnesses traveled from out of state but that Kona failed to show why overnight stays beyond the two days of trial were necessary. The court recommended awarding fees and allowances only for the trial days, consistent with the statutory framework.
Taken together, the court recommended taxing $8,914.22 in recoverable costs. The court noted that objections must be filed within fourteen days before final adoption of the recommendation.
Looking Forward
Patent litigation rarely intersects with franchising at the scale reflected in this MDL, yet the opinion illustrates how these disputes can impact franchise systems with specialized equipment, mobile units, or proprietary processes. When a franchisor or franchisee becomes involved in large-scale IP litigation, the cost and procedural complexity can expand rapidly. Consolidated proceedings, claim-construction hearings, expert discovery, and post-trial motions can all generate recoverable costs that parties may overlook when initially assessing exposure. This decision highlights the importance of understanding not only potential damages but also the additional financial consequences associated with litigation that advances to trial and post-verdict briefing.
For franchisors, the case also underscores the need for clarity in system design and intellectual-property ownership. As franchise systems innovate—particularly those relying on mobile units, food-service vehicles, or unique dispensing equipment—patent disputes may arise in multiple jurisdictions. Clear contractual language addressing indemnification, cooperation obligations, and cost-allocation mechanisms can help manage the risks inherent in multi-forum litigation. Likewise, franchisors may benefit from monitoring patents in adjacent business categories to assess potential exposure before disputes escalate.
The case also offers a practical reminder that, in cost proceedings, courts distinguish sharply between expenses incurred “in this action” and those incurred in related MDL litigation. Franchisors involved in multi-state disputes should maintain clear internal records of where costs arise to preserve or contest taxation appropriately. As MDLs become more common in specialized franchise industries, parties may increasingly confront questions about how consolidated proceedings intersect with individual actions, verdicts, and cost awards.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter APC and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
