Supreme Court Slightly Smooths Difficult Path for Copyright Plaintiffs in Kirtsaeng

I’ve had the pleasure of representing both plaintiffs and defendants in copyright cases.  See  The intake conversation varies dramatically, however, depending on which side of a case I am asked to represent, because of the court’s discretion to award attorneys’ fees to the prevailing party in a copyright case.  17 USC § 505.

On the defense side, I have represented companies with significant operating capital.  Having been sued, unless there is an immediate settlement available they have no choice but to appear and defend the case.  While the risk of paying not only damages but attorneys’ fees to a prevailing plaintiff is an important consideration, this would not have been catastrophic to my clients.  A prevailing defendant could also hope to recover its attorneys’ fees.  Thus, the possibility of a fee award is noted but not overwhelming when discussing a copyright case with a company defendant.

By contrast, for an individual or a small company considering a copyright case against a company defendant, the possibility of an adverse fee award can be catastrophic.  I have found the mere possibility of not only losing a case but also paying the attorneys’ fees incurred by a corporate defendant often ends consideration of whether to file, or continue to pursue, a copyright case.

The Supreme Court recently eased the potential copyright plaintiff’s path slightly in Kirtsaeng v. John Wiley & Sons, Inc.

Years ago courts tended to award attorneys’ fees to prevailing copyright plaintiffs more as a matter of course, whereas fee awards to prevailing defendants were generally limited to frivolous cases.

In Fogerty v. Fantasy, 510 US 517 (1994) the Supreme Court held that courts may not award attorneys’ fees a matter of course nor differently treat prevailing plaintiffs and prevailing defendants.  The Fogerty court said courts may award attorneys’ fees to whichever side prevails based upon a variety of factors, including not only “frivolousness, motivation [and] objective unreasonableness” but also the purposes of the Copyright Act.

Since 1994, and until now, whenever I gave a “Fogerty v. Fantasy” disclosure to a potential copyright plaintiff they folded their tent and declined to file the case.  This ended the matter unless they also had the option of filing an implied contract (“idea submission”) case, where an award of attorneys’ fees is usually not available.

Kirtsaeng changes the conversation concerning attorneys’ fees in copyright cases.  The Supreme Court held that while courts must still consider all of the factors enunciated in Fantasy v. Fogerty, substantial weight must be given to the “objective reasonableness of the losing party’s position.”  The Court said that this test enhanced the probability that both creators and users of copyrighted works (i.e. plaintiffs and defendants) would enjoy the substantive rights provided by the Copyright Act.  By contrast, the suggestion that greater weight should be given to whether the case resolved an important but close issue of copyright law would unduly penalize a party who litigates a reasonable position to conclusion.

Now, instead of hearing that attorneys’ fees can be awarded equally to plaintiffs or defendants, under Kirtsaeng a plaintiff with a potential meritorious copyright case may elect to proceed with greater confidence that bringing a reasonable case to a conclusion will not result in an adverse fee award if the trier of fact disagrees.

The Kirtsaeng case, plus the Supreme Court’s previous ruling that laches are no bar to a copyright case filed within three years of infringement,, presages in uptick in the filing of copyright actions.