Supreme Court Makes It (Slightly) Easier To Award Attorneys' Fees For Bogus Copyright Lawsuits

from the a-little-bit dept

You may recall the Kirtsaeng case that we covered a few years back, in which a student, Sudap Kirtsaeng, had been sued for copyright infringement by publishing giant John Wiley for buying English-language textbooks in Thailand (that were cheap) and then reselling them to students in the US. It was a classic arbitrage situation. Wiley insisted that this was infringing, while Kirtsaeng pointed to the First Sale doctrine, allowing people to resell physical products they've legally purchased, even if they include copyright-covered content. Wiley's argument against first sale is that it only applied to content that was "legally made under this title." Thus, since the textbooks were made in Thailand and not under US copyright law, First Sale didn't apply. The Supreme Court, thankfully, rejected that argument 6 to 3, and said that first sale does apply. That was good.

The case then went back to the lower courts where Kirtsaeng sought to have Wiley pay his legal fees. The lower court and the appeals court both rejected this request, arguing that the standard for assigning attorneys' fees in copyright cases was whether or not the plaintiff bringing the case had an "objectively reasonable" argument -- and noting that with 3 of the 9 Justices eventually siding with Wiley, the case was likely "objectively reasonable," even if it failed in the end. This argument also reached the Supreme Court and on Thursday, the Justices decided to tweak the standard.

Very similar to the case it decided earlier in the week concerning patent damages (and, in fact, it cites that case in this ruling), the Supreme Court rejects the purely "objectively reasonable" standard test as being too "rigid." It's pretty clear that the court thinks that lower courts should have some leeway in determining the appropriate remedies, rather than sticking to a set of strict guidelines.
All of that said, objective reasonableness can be only an important factor in assessing fee applications—not the controlling one. As we recognized in Fogerty, §505 confers broad discretion on district courts and, in deciding whether to fee-shift, they must take into account a range of considerations beyond the reasonableness of litigating positions.... That means in any given case a court may award fees even though the losing party offered reasonable arguments (or, conversely, deny fees even though the losing party made unreasonable ones). For example, a court may order fee-shifting because of a party’s litigation misconduct, whatever the reasonableness of his claims or defenses.... Or a court may do so to deter repeated instances of copyright infringement or overaggressive assertions of copyright claims, again even if the losing position was reasonable in a particular case. See, e.g., Bridgeport Music, Inc. v. WB Music Corp., 520 F. 3d 588, 593–595 (CA6 2008) (awarding fees against a copyright holder who filed hundreds of suits on an over-broad legal theory, including in a subset of cases in which it was objectively reasonable). Although objective reasonableness carries significant weight, courts must view all the circumstances of a case on their own terms, in light of the Copyright Act’s essential goals.
Based on this, the court sent the case back down to the lower court to reconsider, since it originally rejected the request for fees by saying the original claims were "objectively reasonable." So now the court has to consider "other stuff" not clearly laid out by the Supreme Court to see if it could award attorneys' fees for other reasons -- such as the fact that the case was useful in settling an important, but until then, unsettled bit of law: whether or not first sale applied to foreign made goods.

This is probably, mostly, a good thing. Rigid tests can fail in unique circumstances, so granting flexibility is good. But of course, there's also a downside to flexibility, in that it leads to greater uncertainty, and that may scare off certain worthwhile activities. Either way, the court seems to have made the right decision here, and now Kirtsaeng gets another shot at getting attorneys' fees from Wiley.
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Filed Under: copyright, fee shifting, fees, sudap kirtsaeng, supreme court
Companies: john wiley

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  1. icon
    G Thompson (profile), 18 Jun 2016 @ 12:53am

    So the USA might be slowly moving into the more equitable "Loser Pays" form of lawsuits? First Copyright next Torts...

    OMG *faints*

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