17 U.S.C. § 505 Was At Issue—Objective Reasonableness Plus Other Factors Should Be Weighed.
Justice Kagan, for a unanimous U.S. Supreme Court, clarified the factors to be weighed for purposes of discretionarily awarding attorney’s fees to a prevailing party under 17 U.S.C. § 505, the Copyright Act’s fee-shifting statute.
In Kirtsaeng dba Blue Christine99 v. John Wiley & Son, Inc., No. 15-375 (U.S. Supreme Court June 16, 2016), defendant had won a “first-sale” doctrine defense in a copyright infringement case, seeking around $2 million in fees under section 505. The district court denied fees based on the perception that plaintiff’s positions in the case had been reasonable, a ruling affirmed by the Second Circuit.
On certiorari, SCOTUS remanded for another look, but clarified the discretionary factors to be weighed by district judges under section 505. It agreed with the defense that a substantial factor to weigh was the reasonableness of the losing party’s positions, finding that a favorable ruling in a “close case” with important legal issues should not be the test. However, it found that other relevant circumstances apart from objective reasonableness needed to be considered, such as litigation misconduct, deterrence of repeated instances of bringing meritless copyright infringement claims, and deterrence of overaggressive assertion of claims. The Court found that the Second Circuit’s test was effectively a presumption against granting fees by focusing solely on objective reasonableness, a much too rigid test requiring a “redo” by the district judge.
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