Supreme Court Sets New Standard For Attorney Fee Awards in Copyright Suits
Jun. 17, 2016|By Molly Rogers
When we advise our clients whether to litigate and how to litigate, the likelihood of an attorney fee award is paramount. Attorney fee awards are never a certainty. But knowing that you are likely to recover your fees at the conclusion of a case or may have to pay the other side’s fees often dictates litigation strategy. This week, the Supreme Court issued a unanimous decision that clarifies the standard for recovering attorney’s fees in copyright suits. This will allow us to better predict how the courts will rule on fee requests.
The Copyright Act provides that a court “may” award attorney’s fees to the prevailing party in a copyright infringement action. In short, the decision is left to the court’s discretion. Over twenty years ago, in a case involving CCR frontman John Fogerty, the Supreme Court named four non-exclusive factors that could “guide” courts in awarding fees: (1) the frivolousness of the losing party’s position, (2) the losing party’s motivation, (3) the objective reasonableness of the losing party’s position, and (4) other considerations of compensation and deterrence. The Court also held that prevailing plaintiffs and defendants must be treated the same. But the Supreme Court acknowledged that there was “no precise rule or formula” for courts to follow and did not direct district courts how to apply the factors. As a result, a split arose among the circuits as to whether the factors needed to be weighed evenly or whether some factors—such as the “objective reasonableness” factor—should be given greater weight.
On Thursday, the Supreme Court resolved that issue. The Supreme Court held in Kirtsaeng v. John Wiley & Sons, Inc. that the Copyright Act gives broad, but not limitless, discretion to district courts. While courts should give “substantial weight to the objective reasonableness of the losing party’s position,” a finding of reasonableness does not create a legal presumption against a fee award and courts must still take into account all of the other circumstances relevant to granting fees. As Justice Kagan explained, reasonableness is an important factor but “not the controlling one.”
The Supreme Court also rejected the argument that fee awards should be granted in cases that “meaningfully clarify” copyright law, holding that such a rule would not advance the goals of the Copyright Act and would be difficult to administer, given that judges may not know whether a newly-decided issue has legal significance.