U.S. Supreme Court Clarifies Standard for Awarding Attorneys’ Fees to Successful Copyright Litigants.

On June 16, 2016, the U.S. Supreme Court in a unanimous decision, clarified the standard for awarding attorneys’ fees under the Copyright Act. This is the second time the case of Kirtsaeng v. John Wiley & Sons, Inc, No. 15-375, has come before the Supreme Court.  Kitrsaeng was sued by respondent John Wiley & Sons, Inc., a textbook publisher. Kirtsaeng won the first Supreme Court appeal, which resulted in a clarification of the “first sale” doctrine.  Having prevailed, Kirtsaeng sought more than $2 million in attorney’s fees under § 505 of the Copyright Act.  The Second Circuit affirmed the district court’s denial of this request, finding that Wiley had taken reasonable positions throughout litigation, and awarding fees would not serve the Copyright Act’s underlying purpose—enriching the public through access to creative works. Although the Copyright Act gives the district court discretion to award attorneys’ fees, the Supreme Court emphasized that the discretion must be exercised under set standards to increase the predictability of the result for both plaintiffs and defendants. The Supreme Court noted that the Second Circuit appeared to focus solely on the objective reasonableness of the parties’ litigation positions, which is an important factor, but not the only factor to be considered.   By focusing too narrowly on the parties’ litigation positions, a court may lose sight of the goals of the Copyright Act. The Court acknowledged the fundamental nature of litigation, that “both plaintiffs and defendants can (and sometimes do) make unreasonable arguments,” a fact which “favors plaintiffs because a losing defendant will virtually always be found to have done something culpable.” Slip op. at 9 (emphasis in original). In addition to the objective reasonableness of the parties’ litigation positions, the Supreme Court held that lower courts should address “a range of considerations,” including, frivolousness, motivation, objective reasonableness, and the need in particular circumstances to advance considerations of compensation and deterrence.  “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.” Slip op. at 11. Because it was unclear if the Second Circuit (or district court) considered all of these factors, the Supreme Court vacated and remanded, emphasizing, however, that it was not suggesting that any different outcome would necessarily occur in this case. For more information regarding the Copyright Act or Kirtsaeng v. John Wiley & Sons, Inc, please contact Kathleen Barnett Einhorn, Esq., Director of the firm’s Complex Commercial Litigation Group at keinhorn@genovaburns.com, or Jennifer Borek, Esq., a Partner in the Complex Commercial Litigation Group at jborek@genovaburns.com.