Monday, July 11, 2016

Copyright litigation attorneys' fees standard espoused by Supreme Court

On June 16, 2016, the Supreme Court decided Kirtsaeng v. John Wiley and Sons, Inc., and  clarified the standard district courts should apply when exercising discretion in awarding attorney's fees to prevailing parties in copyright suits under Section 505 of the Copyright Act (17 U.S.C. § 505). The High Court held that while allowed to exercise its "broad" discretion  to award attorney's fees under Section 505,  a district must give substantial weight to the objective reasonableness of the losing party's litigation position, as well as also  recognize all other factors and criteria relevant to granting the fees.

In a unanimous opinion authored by Justice Kagan, the Court acknowledged the open-ended discretion and leeway the district courts have under Section 505 with no "precise rule or formula" for granting attorney's fees. The Court pointed to its 1994 Fogerty decision where it "established several principles and criteria to guide" the district courts' decisions under Section 505, all in accordance with the overarching principle of asking whether the award would serve to encourage litigation that would further the goals of the Copyright Act. The Court noted that Fogerty established two "restrictions" (i.e., (1) attorney's fees cannot be awarded as a matter of course and (2) prevailing plaintiffs and prevailing defendants must be treated the same) and " 'several non-exclusive factors' to inform a court's fee-shifting decisions: 'frivolousness, motivation, objective unreasonableness and the need in particular circumstances to advance considerations of compensation and deterrence.'  The Court remanded the case stating “[W]e do not at all intimate that the District Court should reach a different conclusion. Rather, we merely ensure that the court will evaluate the motion consistent with the analysis we have set out—giving substantial weight to the reasonableness of Wiley's litigating position, but also taking into account all other relevant factors.”