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Supreme Court Revisits Standard for Awarding Attorneys' Fees in Copyright Cases

April 28, 2016
Post by Brandon W. Clark

Earlier this week the Supreme Court heard oral arguments addressing the relevant standard for awarding attorneys' fees in cases involving copyright law. The Court's ruling, expected later this spring, will likely have a significant impact on copyright litigation cases.

Section 505 of the Copyright Act provides that a district court "may"award a reasonable attorney's fee to a "prevailing party‚¬. Due to the vague wording of the statute, the district courts have differed in the standards used to determine whether or not the prevailing party should be awarded attorneys' fees in copyright cases. The Ninth and Eleventh Circuits consider whether the prevailing party's successful claim or defense advanced the purposes of the Copyright Act. The Fifth and Seventh circuits employ a presumption in favor of attorneys' fees for a prevailing party that the losing party must overcome. The Second Circuit places "substantial weight"on whether the losing party's claim or defense was "objectively unreasonable‚¬. Additionally, other court of appeals have adopted several non-exclusive factors that the Supreme Court noted in a footnote ofFogerty v. Fantasy, Inc., 510 U.S. 517 534 n.19 (1994) that include frivolousness, motivation, objective unreasonableness and considerations of compensation and deterrence.

The case before the Court, Kirtsaeng v. John Wiley & Sons, is a dispute over copyrighted textbooks produced overseas but imported to the United States and resold by Kirtsaeng without the publisher's permission. Mr. Kirtsaeng argued that the "First Sale"doctrine applied but lost in the district court and the Second Circuit Court of Appeals.  The Supreme Court reversed, concluding that the "First Sale"doctrine applied and that Kirtsaeng could not be help liable for copyright infringement.

On remand, Kirtsaeng, attempted to recover his attorney's fees as the prevailing party. He again lost in both the district court and Second Circuit after a finding that Wiley's suit was not unreasonable. Kirtsaeng successfully petitioned the Supreme Court to hear his case for a second time.

Kirtsaeng argues that that the Second Circuit's standard creates a presumption against awarding fees because it only considers the reasonableness of the claims of a copyright holder, not of those by an accused copyright infringer. Kirtsaeng further argues that the proper standard is that followed by the Ninth and Eleventh Circuits because it advances the aims of the Copyright Act set forth inFogerty. Additionally, Kirtsaeng believes the ultimate determination should be based on the "totality of the circumstances"and should take into account any equitable factors that are relevant and "faithful to the purpose of the Copyright Act.‚¬

Wiley contends that the Second Circuit's "objective reasonableness"standard does take into account theFogerty factors and treats both plaintiffs and defendants evenhandedly. Both parties contend there are significant public policy considerations at stake as well, especially in cases involving extreme differences in the financial resources available to potential litigants. The Court's decision will likely have a significant impact on both plaintiffs and defendants as they navigate the rising costs and increasing frequency of copyright litigation cases.

 

Brandon W. Clark is the Chair of the Copyright And Entertainment Law Practice Group at McKee, Voorhees & Sease, PLC. For additional information please visitwww.ipmvs.com or contact Brandon directly via email atbrandon.clark@ipmvs.com.


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The attorneys of McKee, Voorhees & Sease, P.L.C. designed this blog as an informational and educational resource about intellectual property law for our clients, other attorneys, and the public as a whole. Our goal is to provide cutting-edge information about recent developments in intellectual property law, including relevant case law updates, proposed legislation, and intellectual property law in the news.

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