MATTEL, INC., a Delaware corporation,
et al.,
Plaintiff,
VS.
MGA ENTERTAINMENT, INC., a
California corporation, et al.,
Defendant.
AND CONSOLIDATED ACTIONS
PUBLIC REDACTED VERSION
Hearing Date:
Time:
Place:
TBD
TBD
Courtroom 9D
QUINN EMANUEL URQUHART & SULLIVAN, LLP
John B. Quinn (Bar No. 090378)
(johnquinn@quinnemanuel.com )
William C. Price (Bar No. 108542)
(williamprice@quinnemanuel.com )
Michael T. Zeller (Bar No. 196417)
(michaelzeller@quinnemanuel.com )
865 South Figueroa Street, 10th Floor
Los Angeles, California 90017-2543
Telephone: (213) 443-3000
Facsimile: (213) 443-3100
8 Attorneys for Mattel, Inc. and Mattel de
Mexico, S.A. de C.V.
UNITED STATES DISTMCT COURT
CENTRAL DISTRICT OF CALIFORNIA
SOUTBERN DIVISION
CASE NO. CV 04-9049 DOC (RNBx)
Consolidated with
Case No. CV 04-09059
Case No. CV 05-02727
Hon. David 0. Carter
MATTEL, INC.'S OPPOSITION TO
MGA ENTERTAINMENT, INC.'S
MOTION FOR ATTORNEY'S FEES
AND "FULL COSTS" UNDER
SECTION 505 OF THE
COPYRIGHT ACT
Discovery Cut-off:
Pre-trial Conf:
Trial Date:
October 4, 2010
January 4, 2011
January 11, 2011
00505.07975/4139341.2
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT 1
I. MGA IS NOT ENTITLED TO ATTORNEY'S FEES AND FULL
COSTS UNDER THE COPYRIGHT ACT 4
A. Mattel's Copyright Claim Was Objectively Reasonable, And
MGA Has Failed To Prove Otherwise 6
B. Mattel Brought This Litigation In Good Faith, And MGA's
Efforts To Prove Otherwise Fail 10
C. Fee Shifting Does Not Advance Considerations Of
Compensation And Deterrence 16
II. MGA'S MOTION SHOULD BE DENIED BECAUSE MGA FAILED
TO SUBMIT BILLING RECORDS ADEQUATE TO DETERMINE
WHETHER ITS FEES WERE EITHER REASONABLE OR
PROPERLY APPORTIONED 18
A. MGA's Complete Redaction Of All Work Descriptions Prevents
Mattel And The Court From Evaluating Whether -The Fees Were
Reasonably And Necessarily Incurred In Defense Of The
Copyright Claim 19
B. MGA Should Not Be Awarded Attorney's Fees And Costs
Because It Failed To Apportion These Costs 21
C. Even Witholiiiiiiient Or Billing Descriptions, MGA's
Demand For In Attorney's Fees And Costs Is
Grossly Excessive 26
D. Should The Court Decide To Award Fees, It Should Reduce
Them 30
III. MATTEL IS ENTITLED TO SET-OFF ATTORNEY'S FEES
INCURRED IN DEFENSE OF MGA'S LANHAM ACT CLAIMS 31
IV. MGA IS NOT ENTITLED TO "FULL COSTS" UNDER THE
COPYRIGHT ACT 3 I
CONCLUSION 32
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1
TABLE OF AUTHORITIES
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Page
Cases
Assessment Technologies of WI, LLC v. WIREdata, Inc.,
361 F.3d 434 (7th Cir. 2004) 5
Automotive Prods., plc v. Tilton Eng'g, Inc.,
1993 WL 660164 (C.D. Cal. Sept. 16, 1993) 20
Berkla v. Corel Corp.,
302 F.3d 909 (9th Cir. 2002) 18
Chalmers v. City of Los Angeles,
796 F.2d 1205 (9th Cir. 1986) 18
Copeland v. Marshall,
641 F.2d 880 (D.C. Cir. 1980) 26
Dr. JKL Ltd. v. HPC IT Education Center,
749 F. Supp. 2d 1038 (N.D. Cal. 2010) 30
EOS GMBH Electro Optical Sys. v. DTM Corp.,
2002 WL 34536678 (C.D. Cal. Mar. 18, 2002) 19, 20
Earthquake Sound Corp. v. Bumper Indus.,
352 F.3d 1210 (9th Cir. 2003) 27
Entm't Research Group, Inc. v. Genesis Creative Group, Inc.,
122 F.3d 1211 (9th Cir. 1997) passim
Estate of Hevia v. Potrio Corp.,
602 F.3d 34 (1st Cir. 2010) 14
Ets-Hokin v. Skyy Spirits, Inc.,
323 F.3d 763 (9th Cir. 2003) 4, 6, 19
Fantasy, Inc. v. Fogerty,
94 F.3d 553 (9th Cir. 1996) 5
Fogerty v. Fantasy, Inc.,
510 U.S. 517 (1994) 4, 5, 17
MATTEL'S OPP TO MGA'S MOTION FOR ATTORNEY'S FEES AND COSTS UNDER COPYRIGHT ACT
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Fogerty v. MGM Group Holdings Corp., Inc.,
379 F.3d 348 (6th Cir. 2004) 6, 7
Halicki Films LLC v. Sanderson Sales & Marketing,
547 F.3d 1213 (9th Cir. 2008) 16
Harris Custom Builders Inc. v. Hoffmeyer,
140 F.3d 728 (7th Cir. 1998) 6, 29
Hensley v. Eckerhart,
461 U.S. 424 (1983) 4, 18
Hustler Magazine Inc. v. Moral Majority Inc.,
796 F.2d 1148 (9th Cir. 1986) 17
Identity Arts v. Best Buy Enterprise Servs. Inc.,
2008 WL 820674 (N.D. Cal. Mar. 26, 2008) 24
Innovention Toys, Inc. v. MGA Entm't, Inc.,
07-CV-6510-MiLCF-ALC (E.D. La. Jan. 28, 2009) 14
In Re Fine Paper Antitrust Litig.,
751 F.2d 562 (3d Cir. 1984) 21
Johnson v. University College of University of Alabama in Birmingham,
706 F.2d 1205 (11th Cir. 1983) 21
Lotus Dev. Corp. v. Borland Ina Inc.,
140 F.3d 70 (1st Cir. 1998) passim
MGIC Indem. v. Weisman,
803 F.2d 500 (9th Cir. 1986) 20
Magnuson v. Video Yesteryear,
85 F.3d 1424 (9th Cir. 1996) 5
Martinez v. Home Depot USA, Inc.,
2007 WL 2254432 (E.D. Cal. Aug. 2, 2007) 20
Mattel, Inc. v. Goldberger Doll Mfg. Co.,
236 F.R.D. 175 (S.D.N.Y. 2006) 14
Mattel, Inc. v. MGA Entm't, Inc.,
616 F.3d 904 (9th Cir. 2010) 1, 8, 9
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Mattel, Inc. v. Walking Mountain Prods., Inc.,
353 F.3d 792 (9th Cir. 2004) 14, 16
Mattel, Inc. v Walking Mountain Prods., Inc.,
2004 WL 1454100 (C.D. Cal. June 21, 2004) 17
Matthew Bender & Co., Inc. v. West Pub. Co.,
240 F.3d 116 (2d Cir. 2001) 1, 6
Mitek Holdings, Inc. v. Arce Eng'g Co.,
198 F.3d 840 (11th Cir. 1999) 7, 17
Modular Arts, Inc. v. Interlam Corp.,
2009 WL 151336 (W.D. Wash. Jan. 20, 2009) 6, 12
NLFC, Inc. v. Devcom Mid-America, Inc.,
916 F. Supp. 751 (N.D. Ill. 1996) 11
Nicholls v. Tufenkian Import/Export Ventures, Inc.,
2005 WL 1949487 (S.D.N.Y. Aug. 11, 2005) 10
Oskar Sys., LLC v. Club Speed, Inc.,
2010 WL 4235812 (C.D. Cal. Oct. 20, 2010) 27
Penguin Books U.S.A., Inc. v. New Christian Church of Full Endeavor, Ltd.,
2004 WL 728878 (S.D.N.Y. April 6, 2004) 10
Perfect 10, Inc. v. CCBill LLC,
488 F.3d 1102 (9th Cir. 2007) 31
Perfect 10, Inc. v. Visa Intl Serv. Ass'n,
2005 WL 2007932 (N.D. Cal. Aug. 12, 2005) 7, 8, 12, 13
Reed v. Peterson,
2005 WL 1522187 (N.D. Cal. June 27, 2005) 10, 12
Rodriguez v. Del Taco, Inc.,
2002 WL 32987532 (C.D. Cal. Jan. 10, 2002) 26
Smith v. Jackson,
84 F.3d 1213 (9th Cir. 1996) 6, 8
Stephen W. Boney, Inc. v. Boney Services, Inc.,
127 F.3d 821 (9th Cir. 1997) 30, 31
-iv-
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T-Peg, Inc. v. Vermont Timber Works, Inc..,
2010 WL 3895715 (D. N.H. Sept. 30, 2010) 30
The Traditional Cat Ass'n, Inc. v. Gilbreath,
340 F.3d 829 (9th Cir. 2003) 19, 24
Thelen Oil v. Fina Oil,
962 F.2d 821 (8th Cir. 1992) 19
Trustees of Directors Guild of America-Producer Pension Benefits Plans v. Tise,
234 F.3d 415 (9th Cir. 2000) 30
UMG Recordings, Inc. v. Veoh Networks Inc.,
2010 WL 1407316 (C.D. Cal. April 6, 2010) 15, 16
United States v. $1,379,879.09 Seized From Bank of America,
374 F. App'x 709, 711 (9th Cir. 2010) 20
Wall Data, Inc. v. Los Angeles County Sheriffs Dep't,
447 F.3d 769 (9th Cir. 2006) 5
Yankee Candle Co., Inc. v. Bridgewater Candle Co., LLC,
140 F. Supp. 2d 111 (D. Mass. 2001) 11
Statutes
15 U.S.C. § 1117(a) 30
17 U.S.C. § 505 passim
Rule 12(b)(6) 8
Rule 30(b)(6) 14
Rule 34 13
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Preliminary Statement
After receiving an award of $88 million on its trade secret claims, which it is
MGA also seeks
in attorney's fees and costs for defeating Mattel's copyright claim. As MGA concedes,
in copyright cases, an award of fees is far from automatic. "[The imposition of a fee
award against a copyright holder with an objectively reasonable litigation position will
generally not promote the purposes of the Copyright Act." Matthew Bender & Co.,
Inc. v. West Pub. Co., 240 F.3d 116, 122 (2d Cir. 2001). Mattel's litigation position
was, by any standard, including that applied by the Ninth Circuit, "objectively
reasonable." The purposes of the Copyright Act are served by deterring frivolous
actions and encouraging reasonable ones, not by shifting fees in a case which this Court
has repeatedly acknowledged raises novel and important issues usefully briefed and
argued by two parties well-represented by private counsel. This is precisely the sort of
case where Courts do not shift fees,
MGA's only real argument that Mattel has not been reasonable is grounded in its
claim that "Mattel had absolutely no objective evidence that the original drawings were
made other than in 1998." Mot. at 14. That is truly astonishing. A wealth of evidence
showing exactly that was introduced at trial, as it was at the first trial—when the first
jury found that Bryant created virtually every Bratz work at issue, as well as the Bratz
name and characters, while he was employed by Mattel and not in 1998. Those
findings have been vacated, but to say that Mattel "had absolutely no objective
evidence" supporting its claims is absurd. Indeed, the Ninth Circuit itself recognized
the substance of Mattel's claims and went so far as to say: lilt might have been
reasonable to hold that some of the Bratz dolls were substantially similar to Bryant's
sketches, especially those in the first generation." Mattel, Inc. v. MGA Entm't, Inc.,
616 F.3d 904, 917 (9th Cir. 2010) (emphasis in original).
MGA also justifies its demands by arguing the "destruction of a smaller
competitor was precisely Mattel's objective." Mot. at 1. That ground has been covered
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repeatedly. As MGA itself has so often argued, if Mattel is guilty of anything, it is of
delaying to bring its claims against MGA until it had definite information about Carter
Bryant's relationship with the company. MGA was a very successful company, and
Mattel hesitated long and hard before suing.
Even if it could make a case for fee shifting, which it cannot and does not, MGA
has failed to carry its burden to apportion its fees between its defense of Mattel's
copyright claim and other activity. See Entm't Research Group, Inc. v. Genesis
Creative Group, Inc., 122 F.3d 1211, 1230 (9th Cir. 1997) (finding district court's
failure to follow the "rule" established by the Supreme Court "requiring segregation of
attorney's fees" to be clear error) (citing Hensley v. Eckerhart, 461 U.S. 424, 437
(1983)). Among other obvious flaws:
• Mattel's claims based on the conduct of Brawer, Castilla, Cooney,
Contreras, Brisbois, Machado, Trueba, Vargas, Cabrera, Morales, and
Salazar are not related to Mattel's copyright claim at all, yet MGA made
no effort to apportion out the fees it expended defending against those
claims.
• This case was active for more than two and a half years before Mattel
even brought its copyright claim, yet MGA demands, under the Copyright
Act, nearly all the fees it expended before that claim was even brought.
• MGA demands that Mattel nay every dime the Skadden firm ever billed
on this case, more than with no setoff for any of MGA's
many affirmative claims and no consideration of the many non-copyright
claims Skadden defended against.
• MGA demands that Mattel pay in attorney's fees incurred by
O'Melveny & Meyers ("OMM") without mentioning that MGA has sued
that firm for overbilling and without mentioning MGA's own claims
that OMM's misconduct required Skadden to engage in, and bill for,
duplicative, wasteful, and unnecessary work after ONEVI's withdrawal.
• MGA wants Mattel to compensate it for its unilateral decision to hire
more than 13 different law firms to represent it in this matter a shuffling
of lawyeq that is so unprecedented that it has been repeatedly reported in
the press.
1 Schultz Dec. TT 1-18; Drew Combs, The AmLaw Daily, "Mattel v. MGA:
Welcome Back to the 1Dollhouse" (1/12/11) ("There are changes at counsel tables, too.
MGA, which has called on more than nine law firms at various points in the trial and
appellate phases of the litigation, was represented by Skadden, Arps, Slate, Meagher &
(footnote continued)
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Except for fees expended on separate law firm billing numbers, MGA is seeking
reimbursement for every dime its many law firms have billed, including all the fees it
expended defending against Mattel's substantial RICO claim, Mattel's fraudulent
transfer claims, all the fees it expended to mandamus this Court's pre-trial
disqualification order and so on. It is impossible to determine the full scope of MGA's
overreaching because MGA has contrary to clear legal requirements—entirely
redacted the work descriptions in the billing invoices it submitted, but the excessiveness
of MGA's demand is obvious on its face.
Mattel respectfully requests that the application to shift fees in this hard-fought
copyright dispute be denied. Mattel's case was "objectively reasonable" enough for a
jury to award damages and a judge to enter an injunction. It was "objectively
reasonable" enough to command the attention of the Court of Appeals, which issued
both an original opinion and a clarification of its copyright holding; that court gave
specific guidance on the copyright tests to be applied on remand, signaling that it fully
expected the case to go to the jury, as it did. It was "objectively reasonable" enough to
survive this Court's exacting scrutiny at the motion to dismiss and summary judgment
stages. It would be objectively unreasonable, and an abuse of discretion, to allow MGA
Flom at the initial trial. The retrial will be handled by . Orrick, Herrington & Sutcliffe,
which successfully argued the appeal. (0'Melveny & Myers, which had previously
i represented MGA n the case, fi J led a lawsuit against the toy company in uly 2010
seeking $10.2 million in unpaid fees. MGA, which countersued 0'1VIelveny allegin
malpractice, wanted those proceedings stayed until its case against Mattel is resolve ,
but on Nov. 12, 2010, a Los Angeles County superior court judge ruled that the case
could proceed.") (available at http://amlawdaily.typepad.com/amlawdaily/
2011/01/bratzretrial.html) (last visited May 12, 2011), Searcy Dec. Ex. 1; Erin Fuchs,
Law 360, "O'Melveny Says MGA Owes $10M In Bratz Legal Fees" (7/14/10)
(referring to the "revolving door of law firms in connection with the Bratz matters")
(available at http://www.law360.com/topnews/articles/180868/o-melveny-says-mga-
owes-10m-in-bratz-legal-fees) (last visited May 12, 2011), Searcy Dec. Ex. 2; Amanda
Bronstad, National Law Journal, "MGA Pleads to Retain Counsel—or at Least for a
Delay of Bratz Doll Retrial" (1/6/11) ("The disqualification was the latest le al
headache for MGA, which has replaced its lawyers numerous times during t e
copyright disgute.") (available at http://www.law.com/jsp/cc/PubArticleCC.jsp?
id=1202477107603&MGA Pleads to R.etain Counsel mdash or at Least for a
Delay_of Bratz_Doll_Retrial) (lasf viited May 12, 201f) , Seafey DecT Ex. 37
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for no reason or principle having anything
whatsoever to do with the Copyright Act. If any fees are to be awarded, Mattel requests
that the costs be properly apportioned between those specific tasks performed in
defense of Mattel's copyright claim and non-chargeable tasks, and that MGA be
ordered to produce its invoices to Mattel in unredacted form to enable Mattel to
independently review them to identify non-chargeable work.
Argument
I. MGA IS NOT ENTITLED TO ATTORNEY'S FEES AND FULL
COSTS UNDER THE COPYRIGHT ACT
"The burden of establishing entitlement to an attorney's fees award lies solely
with the claimant." Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). "The Supreme
Court [has] identified the following non-exclusive list of factors to guide the award or
denial of attorney's fees: 'frivolousness, motivation, objective unreasonableness (both
in the factual and in the legal components of the case), and the need in particular
circumstances to advance considerations of compensation and deterrence.' Ets-Hokin
v. Skyy Spirits, Inc., 323 F.3d 763, 766 (9th Cir. 2003) (quoting Fogerty v. Fantasy,
Inc., 510 U.S. 517, 534 n. 19 (1994)).
An award of attorney's fees to the prevailing party under the Copyright Act is
discretionary, not automatic. See 17 U.S.C. § 505 ("[T]he court may also award a
reasonable attorney's fee to the prevailing party . . . .") (emphasis added). Fogerty
emphatically rejected the argument that "§ 505 was intended to adopt the 'British
Rule' that "both prevailing plaintiffs and defendants should be awarded attorney's fees
as a matter of course, absent exceptional circumstances." Fogerty, 510 U.S. at 533.
"[T]he [statutory] word 'may' [in 17 U.S.C. § 505] clearly denotes discretion," and
"[t]he automatic awarding of attorney's fees to the prevailing party would pretermit the
exercise of that discretion." Id. Because "Congress legislates against the strong
background of the American Rule" that "parties are to bear their own attorney's fees,"
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1
the Court must consider much more than just prevailing party status in exercising its
"equitable discretion." Id. at 533-34.
MGA argues the Court "is not required to" consider factors such as
frivolousness, motivation, objective unreasonableness of the losing party's legal and
factual arguments, and considerations of compensation and deterrence. Mot. at 11.
The Ninth Circuit holds otherwise. See Magnuson v. Video Yesteryear, 85 F.3d 1424,
1432 (9th Cir. 1996) (remanding for reconsideration of attorney's fees award
"[b]ecause it is not apparent from the district court's decision that it considered the
factors listed in Fogerty"). None of MGA's authorities supports its claim that these
factors need not be considered at all. 2
Citing out-of-circuit authority, MGA also argues that "when defendant is [the]
prevailing party, there is [a] strong presumption in favor of awarding attorney's fees .
." Mot. at 11 (citing Assessment Technologies of WI, LLC v. WIREdata, Inc., 361
F.3d 434, 436-37 (7th Cir. 2004) (emphasis added)). That is not the law in the Ninth
Circuit:
Interlam asserts that there is a strong presumption in favor of awarding
fees to prevailing defendants. Assessment Technologies of WL_LLC v.
WIREdata, Inc., 361 F.3d 434, 437 (7th Cir. 2004). However, there are
several reasons to believe that such a presumption does not apply, in the
Ninth Circuit in general, or in this case in particular. First : WMEclata is a
Seventh Circuit case ., Interlam has not cited Ninth Circuit authority that
indicates an applicable presumption. Second, in WIREdata, an award of
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2 In Fogerty, the Supreme Court observed that circuit courts "ha[ve] listed several
nonexclusive factors that courts should consider in making awards of attorney's fees to
any prevailing party." 510 U.S. at 534 n.19 (emphasis added). The Supreme Court
agreed that "such factors may be used to guide courts' discretion." Id. In Wall Data,
Inc. v. Los Angeles County Sheriff s Dep't, 447 F.3d 769 (9th Cir. 2006), the Court
stated that the district court "may consider (but is not limited to) five factors" when
evaluating whether an award of attorney's fees "furthered the goal of copyright law."
Id. at 787. The Court did not state that the district court's discretion was unbounded; it
affirmed because the district court did not commit a "clear error of judgment in the
conclusion it reached upon a weighing of the relevant factors." Id. In Fantasy, Inc. v.
Fo e , 94 F.3d 553, 560 (9th Cir. 1996), the Court described the -factors as "guides"
and reco,gnized—consistent with the Supreme Court's opinion that courts "may apply
them so long as they are consistent with the purposes of the Copyright Act and are
applied evenly."
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attorney:s fees yvas appropriate because the Plaintiff's conduct came close
to copyright misuse; in that case, the Plaintiff was attempting to extend
copyright protection to public domain data. Id. at 437. No such
accusation of an im permissible application of copyright has been claimed
a ainst the Plaintiff in the present case. Third, in Fogerty, the Supreme
ourt rejected an argument that courts in copyright cases should employ
the "British Rule" and automatically award attorney's fees to prevailing
parties.
Modular Arts, Inc. v. Interlam Corp., 2009 WL 151336, at *1 (W.D. Wash. Jan. 20,
2009). Winning is not enough. See Ets-Hokin, 323 F.3d at 766 (affirming denial of
attorney's fees because "[Ole only factor to weigh in Skyy's favor is the degree of
success obtained."). The same is true here.
A. Mattel's Copyright Claim Was Objectively Reasonable, And MGA
Has Failed To Prove Otherwise
Section 505 is not compensatory; it is a fee-shifting statute designed to deter
frivolous or objectively unreasonable or bad faith copyright cases. See Smith v.
Jackson, 84 F.3d 1213, 1221 (9th Cir. 1996) (affirming denial of attorney's fees
because, inter alia, the "district court also explicitly noted that it did not find
frivolousness or that the suit was motivated by bad faith"); Lotus Dev. Corp. v. Borland
Intl, Inc., 140 F.3d 70, 74 (1st Cir. 1998) (affirming denial of fees because copyright
holder's "claims were neither frivolous nor objectively unreasonable"); Harris Custom
Builders Inc. v. Hoffmeyer, 140 F.3d 728, 730-31 (7th Cir. 1998) (vacating award of
attorney's fees because the copyright claims were objectively reasonable); see also
Fogerty v. MGM Group Holdings Corp., Inc., 379 F.3d 348, 357 (6th Cir. 2004) (citing
Matthew Bender & Co., Inc. v. West Pub. Co., 240 F.3d 116, 122 (2d Cir. 2001) and
holding that an award of attorney's fees to the prevailing defendant was an abuse of
discretion because the copyright claim was objectively reasonable).
MGA argues the "touchstone" of fee shifting is whether the prevailing party's
position "furthered the purposes of the Copyright Act" (Mot. at 8), but that is not the
test. The prevailing party's position may further the purposes of the Act in a close case
or a clearcut one, against a well-meaning litigant or one acting in bad faith. The
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question is not whether the position that ultimately prevails furthers the Copyright Act
(presumably that is why it is prevailing), but whether the litigation does; it turns on the
reasonableness of the positions taken, not who wins. See Mitek Holdings, Inc. v. Arce
Eng'g Co., 198 F.3d 840, 842-43 (11th Cir. 1999) ("The touchstone of attorney's fees
under § 505 is whether imposition of attorney's fees will further the interests of the
Copyright Act, i.e., by encouraging the raising of objectively reasonable claims and
defenses . . . .") (emphasis added); Lotus Dev., 140 F.3d at 75 ("When close
infringement cases are litigated, copyright law benefits from the resulting clarification
of the doctrine's boundaries. But because novel cases require a plaintiff to sue in the
first place, the need to encourage meritorious defenses is a factor that a district court
may balance against the potentially chilling effect of imposing a large fee award on a
plaintiff, who, in a particular case, may have advanced a reasonable, albeit
unsuccessful, claim."); see also Perfect 10, Inc. v. Visa Int'l Serv. Ass'n, 2005 WL
2007932, *5 (N.D. Cal. Aug. 12, 2005) (denying fees: "In looking of the magnitude of
the allegations and potential liabilities, both parties had important economic interest in
the case and thus, rightfully litigated their claims."); MGM Group Holdings, 379 F.3d
at 357 ("While plaintiffs' claim ultimately proved meritless, that does not make it
'objectively unreasonable' as a matter of law or fact.").
Despite the critical importance of assessing the reasonableness of the litigation
positions, MGA treats them in less than a page, bluntly asserting that Mattel never had
any "objective evidence" supporting its claim to ownership of Bratz and that even the
first jury, in 2008, "rejected Mattel's core theory of the case." Mot. at 14. This made-
up history does not withstand scrutiny.
Mattel's copyright claim survived summary judgment in 2008, was met with a
verdict for Mattel and a $10 million damages award following a nearly three month
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tria1, 3 supported further equitable relief issued by the prior district judge sitting in
equity, and then survived summary judgment again on remand in 2010. This
extraordinary level of prior success establishes that the claim was never frivolous,
objectively unreasonable, or brought in bad faith, and strongly weighs against fee
shifting. See Smith v. Jackson, 84 F.3d 1213, 1221 (9th Cir. 1996) (affirming denial of
fees where, inter alia, "the district court concluded that appellants had more success in
pursuing their claims than is typical of copyright infringement actions, mainly due to
their 'respectable evidence of access by defendants' and that the copyright claim "had
a legal basis sufficient to survive summary judgment and a factual basis supported by
expert testimony."); see also Perfect 10, 2005 WL 2007932, at *3-4 (plaintiff's success
in twice obtaining leave to amend its copyright claim demonstrated "possib[ility]" that
plaintiff might be able to properly plead a "potential claimH" sufficient to preclude a
finding that potential copyright claims, despite ultimately being dismissed under Rule
12(b)(6), could be considered "objectively unreasonable").
When MGA sought an emergency motion to stay the post-Phase 1 permanent
injunction, the Ninth Circuit found that "MGA has not met the prevailing standard to
show a substantial likelihood of success on the merits." Mattel Inc. v. MGA Entm't,
Inc., Case No. 09-55673, Dkt. 6952687 at 3 (9th Cir. June 10, 2009). While the Ninth
Circuit ultimately vacated the equitable relief issued by the prior judge, its order on
MGA's emergency motion to stay and subsequent opinion authoritatively confirm the
reasonableness of Mattel's copyright claim. Regarding ownership, the Ninth Circuit
held "[t]he drawings and sculpt"—the main predicates of Mattel's copyright claim-
"clearly were 'inventions' as that term is defined in Bryant's employment agreement
3 MGA claims the first jury "at least hung on the issue of whether the first four
original drawings were made in 1998," Mot. at 14, but the jury determined that MGA
and Larian were liable for infringing Bratz copyrights owned 1Dy Mattel, and awarded
$10 million to Mattel (Dkt. 4279 at 4-5) hardly the rejection of "Mattel's core theory
of the case" that MGA claims. Mot. at 14.
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with Mattel.” Mattel, 616 F.3d at 911. While finding that California state law required
submission of contract interpretation to the jury, the Ninth Circuit found the jury’s
interpretation of this contract “could easily” support Mattel’s claims to ownership of
Bratz. Id. at 912. “On remand, Mattel might well convince a properly instructed jury”
of its ownership claim, the Court ruled. Id. at 913. Likewise, while the prior judge’s
infringement determinations did not apply a correct standard, the Ninth Circuit did not
question that Mattel’s copyright claim remained viable on remand.
Recognizing this, this Court held during the second round of summary judgment
briefing in 2010 that the jury “could easily” find that the first generation Bratz dolls and
two subsequent generation dolls infringed the Bratz drawings. Dkt. 9600 at 18 (“A
reasonable fact-finder could easily conclude that there are articulable and substantial
similarities between the protectable expression of the Jade sketch (Trial Exhibit 1107,
10638) and sculpt (Trial Exhibit 17551)”); id. at 20 (could easily find infringement with
regard to Chloe/Zoe); id. at 22 (could easily find infringement with regard to Yasmin);
id. at 24 (could easily find infringement with regard to Hallidae/Sasha); id. at 29
(similar with regard to Ooh La La Cloe and Formal Funk Dana). The Court also of
course found genuine issues regarding Mattel’s ownership claims. Id. at 9-12.
Mattel lost before the second jury, which found that Mattel did not own Bryant’s
Bratz creations. That finding was dispositive of Mattel’s copyright claim under the
special verdict form, (Dkt. 10518 at 2), so the jury never considered, or needed to
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consider, whether the protectable elements of the Bratz dolls (far right) were
substantially similar to Bryant's drawings (two on left). Still, a comparison of the
drawings and the dolls demonstrates that Mattel's infringement contentions were, at a
minimum, objectively reasonable, as the prior orders and verdicts in Mattel's favor
show.
"[O]nly those claims that are clearly without merit or otherwise patently devoid
of legal or factual basis ought to be deemed objectively unreasonable." Penguin Books
U.S.A., Inc. v. New Christian Church of Full Endeavor, Ltd., 2004 WL 728878, at *3
(S.D.N.Y. April 6, 2004); see Reed v. Peterson, 2005 WL 1522187, at *7 (N.D. Cal.
June 27, 2005) (granting motion for summary judgment in favor of defendant on all
copyright claims but denying fee shifting where "[p]laintiff's copyright claim, while
weak, was neither frivolous nor motivated by anything other than Plaintiff's desire to
gain the protection of his copyrighted work that he believed he was entitled to.");
Nicholls v. Tufenkian Import/Export Ventures, Inc., 2005 WL 1949487, at *5
(S.D.N.Y. Aug. 11, 2005) (denying fees where copyright claim presented a "close
question" of fact, "was sufficiently colorable to overcome a motion to dismiss and
presented a sufficient number of litigable issues to go to trial," and "[b]oth parties had
legitimate economic interests and concerns about protecting their designs"). Mattel's
litigation position was indisputably "objectively reasonable." MGA's abbreviated
effort to suggest otherwise by claiming that the 1998 creation story is unassailable
simply cannot be squared with Judge Larson's view (perhaps wrong, but certainly not
without any reason) that in telling it, Larian was committing perjury.
B. Mattel Brought This Litigation In Good Faith, And MGA's Efforts
To Prove Otherwise Fail
MGA urges that Mattel brought its case with an improper motive to harm MGA,
and that "[a] desire to discourage and financially damage a competitor by forcing it
into costly litigation justifies an award of fees." Mot. at 13. MGA is wrong on all
counts.
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First, the only evidence that anyone at Mattel initiated suit for improper reasons
is the deposition testimony ofRon Brawer—a disgruntled former Mattel employee who
joined MGA. Mot. at 13. Every other witness who has ever been asked about it-
whether still at Mattel or long gone, and including Robert Eckert, Sujata Luther, Tim
Kilpin, Ivy Ross, Douglas Wadleigh, Jean Gomez, Gene Murtha, and Sal Villasenor-
has testified there was no attempt to use litigation to destroy MGA. 4 MGA's argument
defies logic: if this litigation truly were a product of Mattel's business strategy, it would
have sued MGA sooner rather than later and it would have brought every claim it could
think of at the outset. But Mattel did just the opposite: it didn't sue MGA when it first
initiated this case (MGA intervened) and didn't bring its copyright claim until the
factual record substantiating its claim to ownership of Bratz was developed.
Nor do the cases cited by MGA support its position. In NLFC, Inc. v. Devcom
Mid-America, Inc., 916 F. Supp. 751 (N.D. Ill. 1996), the court found bad faith
motivation because the plaintiff "never even tried to gather any evidence to support its
case." Id. at 759. Similarly, in Yankee Candle Co., Inc. v. Bridgewater Candle Co..,
LLC, 140 F. Supp. 2d 111, 118 (D. Mass. 2001), the copyright claim did not have a
"reasonable likelihood of success" and there was extensive "evidence of anti-
competitive motivation in Yankee's prosecution of this suit," including that the plaintiff
deliberately scheduled depositions in order to prevent key employees of the defendant
from attending an important trade show. There is simply no comparable evidence to
support MGA's accusations here. Mattel diligently collected evidence in support of its
copyright claim both before filing suit and after, and, more than just having a
4 Eckert Depo. Tr. (Vol. 8) at 1585:10-19 (4/28/10), Searcy Dec. Ex. 4; Wadleigh
Depo. Tr. (Vol. 1) at 109:6-9 (1/29/10), Searcy 'Dec. Ex. 5; Luther Depo. Tr. (Vol. 1) at
81:19-82:2 (7/8/10), Searcy Dec. Ex. 6; Kilpm Depo. Tr. (Vol. 2) at 512:2-4 (4/8/10),
Searcy Dec. Ex. 7; Gomez Depo. Tr. (Vol. -1) at 192:24-193:4 (1/24/08), Searcy Dec.
Ex. 8; Murtha Depo. Tr. (Vol. 1) at 116:113-117:12 (2/25/10), Searcy Dec. Ex. 9;
Villasenor Depo. 'fr. (Vol. 1) at 220:13-221:2 (7/12/10), Searcy Dec. Ex. 10; Ross
Depo. Tr. (Vol. 1) at 112:19-22 (1/17/08), Searcy Dec. Ex. 11.
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reasonable likelihood of success, actually won on the claim once. No more than that is
required. See, e.g., Lotus Dev. Corp., 140 F.3d at 75 ("Arguably, there is nothing
inherently improper about bringing a claim that is well-founded in law and fact against
one's competitors, even when legal action, if successful, will inflict severe economic
consequences upon them."); Reed, 2005 WL 1522187, at *7 (granting motion for
summary judgment in favor of defendant on all copyright claims but denying
defendant's motion for attorney's fees under § 505 where "[Alaintiff s copyright claim,
while weak, was neither frivolous nor motivated by anything other than Plaintiff s
desire to gain the protection of his copyrighted work that he believed he was entitled
to"); Modular Arts, 2009 WL 151336, at *2 ("As to the third factor, Plaintiff s
motivation was to enforce their copyright registration to maintain a competitive
business advantage. This is a proper motivation.").
MGA also argues that considerations of compensation and deterrence favor an
award of attorney's fees, but the same argument could be made by any prevailing party,
most of whom lack the resources of MGA. See Lotus Dev., 140 F.3d at 75 (affirming
denial of fees: "when a plaintiff prosecutes an action in good faith, in an unsettled area
of law, and with a reasonable likelihood of success, against a party with similar
financial resources, the prevailing party's case for attorney's fees is weaker"); Perfect
10, 2005 WL 2007932, at *4 ("Granting attorney's fees is disfavored when a plaintiff
pursues an action in good faith in an unsettled area of law and the parties have alike
financial resources.").
MGA's deterrence argument, based on Mattel's supposed status as "a prolific
litigant" that engages in "abusive methods of litigation" (Mot. at 12), is not only
unsupported by the evidence, but cannot be addressed at this point lest MGA later claim
that any such findings are preclusive and negate Mattel's Seventh Amendment rights.
Dkt. 10527 at 9-13. The Court is fully empowered to reject MGA's fee motion without
considering its off-point claims about Mattel's litigiousness and motives for suing, and
it should do so.
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MGA's claims are flawed on their face in any event. MGA insists Mattel
employed a "bad faith no-compromise policy" during discovery, but all three of its
examples are demonstrably false. Mot. at 5. First, MGA argues that "[n]o discovery
request issued by Mattel was ever limited by agreement." Id. That is wrong. 5 Second,
MGA argues that "discovery requests propounded upon Mattel were almost never the
subject of production absent a court order." Mot. at. 5. That too is wrong. 6 Third,
MGA claims that John Quinn made the "stunning admission" that Mattel "never
voluntarily produces anything" and "all discovery of Mattel must be conducted by court
order." Mot. at 5. But all Mr. Quinn said was that a good faith objection to a discovery
request excuses production until a motion to compel has been filed and decided. Trial
Tr. (Vol. 2), at 44:9-11 (4/1/11) ("MR. QUINN: Of course, your Honor, if a discovery
request for documents, Rule 34, is served and objections are made, there's no
5 For example, on March 13, 2008, Mattel's counsel Melissa Grant wrote a letter to
Veronica Marlow's counsel Larry McFarland stating "We [Mattel] agreed to narrow the
scope of certain documents requests contained in the subpoenas issued to the Three
Marlow-Related Entities as follows . " March 13, 2008Letter at 2, Searcy Dec. Ex.
12. Mattel proceeded to list 22 requests for production with modified language._ Id. at
2-4. A September 11, 2009 letter from MGA's counsel Bill Molinski to Mattel's
counsel Marshall Searcyidentifies a laundry list of requests for production that "Mattel
is considering withdrawing or limiting." September 11, 2009 Letter at 1, Searcy Dec.
Ex. 13.
6 On June 26, 2009, Mattel's counsel Marshall Searcy wrote an email to MGA's
counsel Jean Pierre Noques stating that "Mattel anticipates serving supplemental
responses to RFP Nos. 88, 89 : 99, 100, 101, 102, 103, 104 and 111 on Thursday, July 6,
2009 and producing any additional responsive documents on a rolling basis after that
date." June 26, 2009 Letter at 5, Searcy Dec. Ex. 14. Similarly, a March 3 1 2010 email
exchange between Annette Hurst, John Quinn, and Bridget Hauler describe Mattel's
willingness "to produce any agendas, minutes, and Eckert memos to the Board
concerning Mattel's Girls' Brands or the performance of executives responsible for
Girls' brands, as long as we can redact all non-responsive information . . . . [that]
contain highly sensitive, irrelevant info such as info re contemplated acquisitions."
Searcy Dec. Ex. 15.
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obligation to produce."). This is hardly a controversial position, particularly since
MGA took the same position during discovery. 7
MGA also cites irrelevant, inadmissible statements about other suits (and
"articles" and "books"), all of which bear absolutely no connection to this case. Mot. at
4 (citing Mattel, Inc. v. Goldberger Doll Mfg. Co., 236 F.R.D. 175 (S.D.N.Y. 2006),
and Mattel, Inc. v. Walking Mountain Prods., Inc., 353 F.3d 792, 814 (9th Cir. 2004)).
Mattel had an objectively reasonable basis to believe that it owned the Bratz drawings
and sculpts created by Bryant and that the Bratz dolls infringed those copyrighted
works; the BARBIE infringement cases MGA cites are wholly irrelevant. The Court's
inquiry must be "narrow[ed]" to "the copyright infringement claim asserted in the case
at hand." Estate of Hevia v. Potrio Corp., 602 F.3d 34, 46 (1st Cir. 2010) (rejecting
claim that multiple lawsuits filed by plaintiff justified fee shifting). Were it otherwise,
MGA's own extraordinary history of aggressive litigation—and sanctions—would
surely weigh against its claim for fees. TX 8809 (listing over 100 lawsuits with MGA
or Larian named as a party); see, e.g., Innovention Toys, Inc. v. MGA Entm't, Inc., 07-
CV-6510-MLCF-ALC (E.D. La. Jan. 28, 2009) (Dkt. 63 at 2), Searcy Dec. Ex. 30
(awarding $6,000 sanction against MGA in connection with a motion for contempt). If
this is a contest, MGA loses: it has been sanctioned in this case for its discovery
misconduct—in far greater amounts than Mattel:
7 E.g. 7/20/07 MGA Letter from William Charron to Michael Zeller at 1, Searcy
Dec. Ex. 16 ("The same objections [by MGA] to similar requests for admission are
currently befbre Judge Infante in connection with a motion to compel . . . .
Consequently, it is premature to answer these requests until Judge Infante has had an
o portunity to rule on the issues."); 11/27/07 MGA Letter from Timothy Miller to Jon
orey at 1, Searcy Dec. Ex. 17 (` [T]he MGA entities and Mr. Larian may decide to
stand on their objections with respect to certain of the interrogatories."); 3/17/08 MGA
Letter from Amy Park to Jon Corey at 1, Searcy Dec. Ex. 18 ("MGA will stand by its
objections to these requests . . . . '); June 25 2009 Letter from Amman Khan to
Marshall Searcy at 3, Searcy Dec. Ex. 19 ("Therefore, unless you describe in detail how
each of these Requests is relevant to the parties' claims or defenses in this action, MGA
Mexico will stand by its objections.") (emphasis in original).
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Docket Title of Order MGA Sanctions
Searcy
Dec. Ex.
20
6/16/06 Civil Minutes re: Mattel's Motion to Enforce
the Court's Order of March 23, 2005 and for
Sanctions
$1,360.00
Dkt. 827
at 10
8/15/07 Order Granting In Part Mattel's Motion to
Enforce The Court's °Order of May 16, 2007, to
Compel MGA to Produce Witnesses for Deposition
Pursuant to Rule 30(b)(6), and Granting Request for
Sanctions
$1,000.00
Dkt. 1305
at 1
12/19/07 Order Re Mattel, Inc.'s Motion To Enforce
The Court's Order Of May 15, 2007 To Compel MGA
To Produce Compelled 'Documents In Unredacted
Form And For Sanctions
$3,500.00
Dkt. 1304
at 1
12/19/07 Order Re Mattel's Motion To Enforce The
Court's Order Of May 15, 2007 To (1) Compel MGA
To Produce Compelled Documents (Including Fee
And/Or Indemnity Agreements Between MGA And
Bryant, (2) Order That Any Privilege Objections Have
Been Waived. And (31 Tmnose Sanctions
$3,500.00
Dkt. 1505
at 34
1/9/08 Order Granting/Denying In Part Mattel's
Motion To Enforce Court's Discovery Orders And To
Compel; To Overrule Purportedly Improper
Tnstructions: And For Sanctions
$6,000.00
Dkt. 5190
at 33
4/14/09 Order No. 17 Re (1) The MGA Parties'
Motion For A Protective Order Staying Discovery On
Trade Dress Claims; (2) Motion Of Mattel, Inc. To
Enforce Prior Court Order And To Compel Responses
To Interrogatories; And (3) Ex Parte Application
Filed By Mattel, Inc. For An Order To Show Cause
Re: MGA Entertainment, Inc.'s Failure To Comply
With Court Order
$4,515.00
$19,875.00
In UMG Recordings, Inc. v. Veoh Networks Inc., 2010 WL 1407316 (C.D. Cal.
April 6, 2010), the Court denied attorney's fees to the prevailing defendant despite
accusations that the plaintiff "pursued discovery in an 'unnecessarily aggressive
manner." Id. at *2. The Court noted that "many of UMG's discovery motions were
granted, and Veoh itself engaged in aggressive discovery practices (for example, filing
so many ex parte applications that the Court eventually ordered Veoh to stop filing
them without prior approval)." Id. Here, as in UMG, many of Mattel's discovery
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motions were granted in whole or part—at least 73 motions to compel or enforce 8—and
MGA also engaged in aggressive discovery tactics. This was undoubtedly hard fought
litigation, but it was hard fought by two large corporations with considerable resources.
Although both sides were aggressive, "[MGA] has failed to demonstrate that [Mattel's]
legal challenge was improper, in bad faith, or contrary to the purposes of the Copyright
Act." See id. at *1-2.
C. Fee Shifting Does Not Advance Considerations Of Compensation And
Deterrence
MGA insists that its defense furthered the purposes of the Copyright Act, but
offers no argument why its victory (on contract grounds), more than any/every other,
did so. The question is not who won, but what specific goal would be served by fee
shifting. See Ets-Hokin, 323 F.3d at 766 (considering whether there is a "need in
particular circumstances to advance considerations of compensation and deterrence").
No legitimate goal would be served by shifting fees here.
8 See, e.g., LASC No. BC314398, 10/5/2004 Ruling On (1) Motion To Compel
Deposition And (2) Motion For A Protective Order And -Establish The Sequence And
Timing Of Discovery, at 2, Searcy Dec. Ex. 21; LASC No. BC314398, 10/20/2004
Order Granting Mattel's Ex Parte Application To Set Compelled Deposition Of
Defendant And Cross-Claimant Carter B, ryant For A Date Certain Pursuant To The
Court's Order Of October 5, 2004, Searcy Dec. Ex. 22; Dkt 195 at 2; Dkt. 175 at 16-17;
Dkt. 286 at 2; Dkt. 487 at 14; Dkt. 412 at 7; Dkt. 493; Dkt. 841 at 8; Dkt 804 at 14;
Dkt. 842 at 7; Dkt. 913; Dkt. 1013 at 12; Dkt. 1291 at 11; Dkt. 1305; Dkt. 1439 at 19;
Dkt 4293 at 2; Dkt. 1426; Dkt 1699 at 19-20; Dkt. 2266 at 22; Dkt. 2577 at 3-4; Dkt.
3921 at 1-2; Dkt. 3111 at 7; Dkt. 3921 at 2; Dkt. 3113 at 7-8; Dkt. 3921 at 1; Dkt. 3092
at 6; Dkt. 3111 at 7; Dkt. 3921 at 3; Dkt. 3420 at 9-10; Dkt. 2921 at 3; Dkt. 3031; Dkt.
3921 at 3; Dkt. 3669 at 3-4; Dkt. 3898 at 1-2; Dkt. 5279 at 56-57; Dkt. 4992 at 29-30;
Dkt. 5088 at 38-39; Dkt. 5092; Dkt. 5279 at 55; Dkt. 6098 at 26-27; Dkt. 5514 at 58;
Dkt. 5279 at 56-57; Dkt. 5510 at 11-12; Dkt. 6456 at 24; Dkt. 6407 at 41; Dkt. 6437 at
33-34; Dkt. 6437 at 34-35; Dkt. 6456 at 24; Dkt. 6671 at 14; Dkt. 7319; Dkt. 8767 at
14-15; Dkt. 7636 at 8, 10; Dkt. 8239-1 at 6-7; Dkt. 8239-1 at 4; Dkt. 7717 at 4; Dkt.
8079 at 14; Dkt. 8079 at 15-18; Dkt. 8079 at 4-5; Dkt. 8079 at 5-6; Dkt. 8459 at 5-6;
Dkt. 8459 at 7; Dkt. 8319 at 2; Dkt. 8459 at 8-9; Dkt. 8752 at 8; Dkt. 8459 at 8-9; Dkt.
8752 at 8; Dkt. 8752 at 4-6; Dkt. 8752 at 6-7; Dkt. 8880; Dkt. 8921 at 3; Dkt. 8974 at
15; Dkt. 9027 at 3; Dkt. 9002; Dkt. 9662; Dkt. 9824; Dkt. 10374.
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First MGA urges that it "prevailed on the merits rather than a technical defense."
Mot. at 11. MGA prevailed on an issue of contract interpretation governed by state
law; in the future, if parties want to assure ownership of work done on nights and
weekends, or of ideas, they will have to so specify in their contracts. See Halicki Films
LLC v. Sanderson Sales & Marketing, 547 F.3d 1213, 1230-31 (9th Cir. 2008)
(affirming denial of attorney's fees under the Copyright Act to the prevailing defendant
where plaintiff reasonably sought to protect interest "that they believed was theirs"
pursuant to contract). This was not Mattel, Inc. v Walking Mountain Prods., Inc., 353
F.3d 792, 797-803 & n.2 (9th Cir. 2004) (cited by MGA), which upheld an award of
fees to an artist represented by the ACLU who "[b]y developing and transforming
associations with Mattel's Barbie doll, [] created the sort of social criticism and parodic
speech protected by the First Amendment and promoted by the Copyright Act."
(emphasis added)). 9 This was a hard fought action between two well-financed
corporations with significant resources and sophisticated counsel.
Second, shifting fees in this circumstance would defeat the purposes of the Act
by discouraging individuals with valid, or even close claims, from suing for
infringement. See Lotus Dev., 140 F.3d at 75 (district court may balance the need to
encourage meritorious defenses "against the potentially chilling effect of imposing a
large fee award on a plaintiff, who, in a particular case, may have advanced a
reasonable, albeit unsuccessful, claim"); Hustler Magazine Inc. v. Moral Majority Inc.,
796 F.2d 1148, 1157 (9th Cir. 1986) ("Section 505 is intended in part to encourage the
assertion of colorable copyright claims and to deter infringement."). "The touchstone
of attorney's fees under § 505 is whether imposition of attorney's fees will further the
9 The court on remand awarded attorney's fees because "the parodic character of
Defendant's work is reasonably perceived and Plaintiffwas objectively unreasonable to
make any other claim." Mattel, Inc. v Walking Mountain Prods., Inc., 2004 WL
1454100, at *1 (C.D. Cal. June 21, 2004) (emphasis added).
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interests of the Copyright Act, i.e., by encouraging the raising of objectively reasonable
claims and defenses, which may serve not only to deter infringement but also to ensure
'that the boundaries of copyright law [are] demarcated as clearly as possible' in order to
maximize the public exposure to valuable works." Mitek Holdings, Inc. v. Arce Eng'g
Co., 198 F.3d 840, 842-43 (11th Cir. 1999) (quoting Fogerty, 510 U.S. at 526-27).
Third, while MGA points out that its victory allows it "to keep marketing Bratz
fashion dolls," promoting consumer choice (Mot. at 11), the only question in this case
was who would provide those choices to consumers. After Mattel won the first trial,
the Court initiated a process to enable Mattel to produce its own Bratz line based on
Bryant's designs. Dkt. 5565 at 13. The defense verdict dictates who can make Bratz,
not whether it can be made at all.
Finally, MGA is not without fault here. Even the second jury concluded that
MGA and Larian intentionally interfered with Bryant's contract with Mattel (Dkt.
10518 at 28), and while that claim was time-barred, the finding of fault militates
against rewarding them by shifting fees. See Berkla v. Corel Corp., 302 F.3d 909, 923
(9th Cir. 2002) (affirming denial of attorney's fees to a prevailing defendant who the
jury found engaged in "a highly questionable business practice" related to an
objectively reasonable but unsuccessful copyright claim).
II. MGA'S MOTION SHOULD BE DENIED BECAUSE MGA FAILED
TO SUBMIT BILLING RECORDS ADEQUATE TO DETERMINE
WHETHER ITS FEES WERE EITHER REASONABLE OR
PROPERLY APPORTIONED
The law is clear that "counsel bears the burden of submitting detailed time
records justifying the hours claimed to have been expended." Chalmers v. City of Los
Angeles, 796 F.2d 1205, 1210 (9th Cir. 1986). The law is also clear that there can be
no recovery of fees under the Copyright Act where work was performed on "distinctly
different claims for relief that are based on different facts and legal theories." Entm't
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Research Group, Inc. v. Genesis Creative Group, Inc., 122 F.3d 1211, 1230 (9th Cir.
1997) (quoting Hensley v. Eckerhart, 461 U.S. 424, 434-35 (1983)).
Even though literally dozens of claims have been asserted in this case, MGA has
made virtually no attempt to apportion fees between work related to Mattel's copyright
claim and other claims. MGA has also provided no work descriptions to support its
application. MGA failed to meet its burden of (1) providing detailed work descriptions
to establish that the fees incurred were reasonable and necessary and give Mattel an
opportunity to challenge them, and (2) apportioning attorney's fees between its defense
of Mattel's copyright claim and litigation on other claims.
A. MGA's Complete Redaction Of All Work Descriptions Prevents
Mattel And The Court From Evaluating Whether The Fees Were
Reasonably And Necessarily Incurred In Defense Of The Copyright
Claim
MGA has not provided a description of the tasks its lawyers performed sufficient
to support even $1, let alone , in fee shifting. By completely redacting the
work descriptions in over pages of invoices (and, as discussed below, by failing
to apportion the fees expended on different claims), MGA "has not met even its most
minimal burden of showing entitlement to any fees or costs." EOS GMBH Electro
Optical Sys. v. DTM Corp., 2002 WL 34536678, at *4-5 (C.D. Cal. Mar. 18, 2002)
(Carter, J.); see also Jadwin v. County of Kern, --- F. Supp. 2d ----, 2011 WL 240695,
at *21 (E.D. Cal. Jan. 24, 2011) (disapproving of "refusal to provide a properly
documented fee motion containing adequate descriptions of hours expended for specific
services provided on identifiable subject matter. This includes failing to provide a
functional delineation of the number of hours spent litigating this case with a
description of the services performed."). MGA's request for fees should be denied
outright. See Thelen Oil v. Fina Oil, 962 F.2d 821, 824 (8th Cir. 1992) ("[I]t is not
inappropriate to deny fees completely when the fee request is outrageously excessive
and unsupported by adequate documentation."); The Traditional Cat Ass'n, Inc. v.
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Gilbreath, 340 F.3d 829, 834 (9th Cir. 2003) ("[W]e can conceive of a case where the
party seeking fees would have so little evidence supporting a fee request that a
wholesale denial might be appropriate . . . ."); see also Entm't Research Group, 122
F.3d at 1231 ("[T]he district court abused its discretion by concluding that the
summaries submitted in conjunction with the declaration of Genesis's counsel were
sufficient to determine exactly how many hours Genesis spent solely defending against
the [copyright] claims. Indeed, in these circumstances, we believe that the district court
erred in not requiring Genesis to submit its original time records and billing statements
so that ERG—and the district court—could determine whether the fees being claimed
were truly for time spent in defending against the [copyright] claims."). MGA's
complete redaction of all work descriptions is "insufficient to sustain an award of
attorney's fees and costs" because it leaves Mattel "without the opportunity to impose a
meaningful objection" and gives the Court no basis "to accept its representations that
the costs and fees are reasonable." EOS, 2002 WL 34536678, at *4-5.
The Court has ordered MGA to submit unredacted billing records to the
Discovery Master, but Mattel is also entitled to review those records so it can
meaningfully challenge MGA's request. See United States v. $1,379,879.09 Seized
From Bank of America, 374 F. App'x 709, 711 (9th Cir. 2010) ("[W]e vacate the fee
award and remand for further proceedings. On remand, the government must have
access to the billing records underlying the fee request, including the specific
descriptions of services rendered; the records should be redacted only to the extent
absolutely necessary to protect information covered by the attorney-client privilege or
the work-product doctrine. The government then must have an opportunity to object to
the fee request."). MGA states, without explanation, that complete redaction of its
billing records is necessary to preserve privilege (Mot. at 17), but MGA has not carried
its burden of justifying this blanket invocation, and the law does not support it. $ee
MGIC Indem. v. Weisman, 803 F.2d 500, 505 (9th Cir. 1986) ("No reason appears why
the timesheets should not have been made available to MGIC and MGIC given the
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opportunity to challenge them."); Martinez v. Home Depot USA, Inc., 2007 WL
2254432, at *3-4 (E.D. Cal. Aug. 2, 2007) (rejecting request that invoices not be
disclosed to opposing party; party opposing fee award could not adequately contest the
reasonableness of the fees sought "without access to a more detailed record");
Automotive Prods., plc v. Tilton Eng'g, Inc., 1993 WL 660164, at *7 (C.D. Cal. Sept.
16, 1993) ("Tilton must turn over its unredacted invoices unless it can show the Court
specifically how providing these invoices will impermissibly infringe on the attorney-
client privilege.").
At a minimum, if MGA's motion for fees is not denied outright, Mattel must be
given an opportunity to challenge its particulars by reviewing MGA's detailed work
descriptions. If the Court determines that any fee award is justified, MGA should be
ordered to disclose its invoices to Mattel, subject only to the most restrictive privilege
limits, and Mattel should be permitted to then respond. 1°
B. MGA Should Not Be Awarded Attorney's Fees And Costs Because It
Failed To Apportion These Costs
Literally dozens of claims have come and gone in this case from MGA's trade
dress claim against Mattel, to both parties' RICO claims, to MGA's wrongful
injunction action, to Mattel's claim against Omni. More than 29 separately-
10 There is no support, on the other hand, for MGA's demand that Mattel be
ordered to turn over its invoices; it is the fee shifting claimant, not the fee shifting
opponent, that must _produce its invoices to support its claim. See Johnson v.
University College ofiniversity of Alabama in Birmingham, 706 F-2a 1205, 1208
(11th Cir. 1983) (affirming district court's decision to quash a subpoena sought by
plaintiffs requiring the defendants to produce their counsel's billing records where "this
defense information was irrelevant to the reasonable fees and hours of plaintiffs'
counsel"); In Re Fine Paper Antitrust Litig., 751 F.2d 562, 587 (3d Cir. 1984) (finding
no abuse of discretion by district court in denyin,g plaintiff s motion for in . camera
production of fees paid by defendants because such discovery could generate inquires
into collateral matters). However, for purposes of apportionment, Mattel is prepared to
submit its invoices to the Discovery Master for review, as has been opiered with
MGA's invoices.
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denominated claims have been asserted," and many of those had multiple subparts;
MGA itself said its unfair competition claim encompassed more than 23 distinct issues
and allegations. Dkt. 10526 at 19-21. MGA is only entitled to fees, in this motion, for
costs incurred in defending the copyright claim.
While Mattel can only evaluate apportionment based on detailed billing records it
has yet to see, what it has seen already suggests that MGA did not apportion its fees to
these many other claims. For example:
• MGA made no effort at all to segregate fees expended defending
against Mattel's RICO claim, even though significant litigation focused
exclusively on that claim, including multiple hearings before the Court
and broad swaths of motions to dismiss and summary judgment
briefing.
• MGA made no effort to segregate work it performed in its defense of
Mattel's multiple claims related to the alleged thefts of non-Bratz
related information by Mr. Brawer, Mr. Castilla, Mr. Cooney, Mr.
Contreras, Ms. Brisbois, Mr. Machado, Ms. Trueba, and Mr. Vargas
(except for a "specific matter" set up by the Orrick firm relating to the
"defense of Jorge Castilla, Schultz Dec. ¶ 5), even though, once again,
a tremendous amount of litigation focused exclusively on those claims.
Literally dozens and dozens of depositions, in Mexico and Canada as
well as the United States, were held on these claims; and extensive
issues relating to everything from jurisdiction to choice of law were
briefed. MGA accounts for none of it.
• MGA made no effort to segregate work it performed in its defense of
Mattel's claims relating to the Omni transaction (other than fees
charged by the Bingham firm for representing Omni, not MGA), even
though 8 very significant depositions (Neil Kadisha, Fred Mashian,
Joseph Moinian, David Nazarian, Leon Neman, Arsalan Gozini, and
Leon Farahnik) were devoted exclusively to that transaction, not to
mention extensive discovery and motion practice.
Dkt. 1, 7714, 7733, 7766, 8583 (04-9049); Dkt. 1 (04-9059); Dkt. 1 (05-2727).
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• MGA made no effort at all to segregate work performed defending
against Mattel's fraudulent transfer claims (and the related prohibited
distributions claim), though discovery and motion practice on those
claims likewise was substantial.
• MGA made no effort at all to segregate work it performed in defending
against Mattel's claims relating to the sample makers, Ms. Cabrera, Ms.
Morales, and Ms. Salazar, even though significant litigation also
focused on them.
• MGA seeks all the fees it billed even before Mattel's copyright claim
was asserted, without regard for the issues litigated at that time (and
despite the Court's rulings that Mattel's claims were not veiled
copyright claims that arose under federal law). See, e.g., Schultz Dec.
1E6 and Schultz Dec. Exh. 2 at 2 (requesting attorneys fees and
submitting bills for work done by O'Melveny & Myers beginning in
June, 2004); Dkt. 180 at 14-17 (04-9059).
• MGA made little effort even to apportion out even the fees it incurred
litigating the many MGA affirmative claims that it lost on. For
example, MGA is seeking every dime invoiced by the Skadden firm,
more than , even though Skadden represented MGA for a
period of years, including active representation up through the recent
trial, and worked on every claim that has ever been in the case-
including every MGA claim. Schultz Dec. ¶7 (declining to apportion
any attorneys fees incurred by the Skadden firm and requesting all
attorneys fees for work done by the Skadden firm); Schultz Dec. Ex. 3
at 2, 8628-8635 (submitting bills for work done by the Skadden firm
between October 2007 and February 2011). Similarly, MGA is seeking
every dime invoiced by the Keller firm as copyright fees, even though
much of her trial time was devoted to arguing MGA's affirmative case.
Mattel rested its case on March 10, 2011, yet MGA seeks substantial
fees incurred after that date. Schultz Dec. ¶8 (declining to apportion
any attorneys fees incurred by Keller Rackaukas); Schultz Dec. Ex. 4 at
8671 (requesting attorneys fees in excess of after March 10,
2011).
• MGA disingenuously attempts to "apportion" fees by providing the
Court with a calculation for fees it has purportedly "excluded" from
both Orrick's and O'Melveny's total bills. See Schultz Dec. ¶ 5-6.
Upon closer examination, all of them relate to matters having nothing
whatsoever to do with Mattel, much less Mattel's copyright claim. Id.
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(purporting to exclude attorneys fees incurred in connection with,
among other things, "miscellaneous commercial questions," "the Art
Attacks litigation," "the Belair litigation," "European competition
issues," and "general MGA matters"). Calling this decision to
"exclude" fees for unrelated litigation against third parties
"apportionment" is hollow and misleading at best.
MGA defends its conceded failure to apportion with the claim that all of Mattel' s
claims were always "inextricably intertwined" with the copyright claim (Mot. at 14-15),
and claims it carved off fees that "have been clearly identified" as non-chargeable.
Mot. at 16. Mattel is in no position to assess what can be "clearly identified" since
nothing has been, but all of the claims in this action did not hinge on such copyright
issues as which elements are protectable or how much the sculpt varied. There can be
no recovery for fees expended on "distinctly different claims for relief that are based on
different facts and legal theories." Entm't Research Group„ 122 F.3d at 1230 (quoting
Hensley, 461 U.S. at 434-35); see also Identity Arts v. Best Buy Enterprise Servs. Inc.,
2008 WL 820674, at *3 (N.D. Cal. Mar. 26, 2008) (court "must make an attempt to
apportion fees between the copyright and non-copyright claims"). "The fact that it is
not a simple task to discern from this data precisely what fees are attributable to the
copyright claims does not excuse a failure to make such an allocation." Gilbreath, 340
F.3d 829, 834 (9th Cir. 2003).
Only the Bratz trade secret claim—confirmed by the Court in its September 2010
Order (Dkt. 8705)—is sufficiently "related" to the Bratz copyright claim for
apportionment purposes that all work done on it might fairly be charged as easily to the
copyright claim. All of the other claims are sufficiently distinct, by virtue of both the
facts and the legal theories involved, that some or all of the work done on them would
not overlap in any way with the copyright claim. See Entm't Research Group, 122 F.3d
at 1230 (holding that 10 common law claims, including claims for intentional
interference and breach of contract, were not "related" to 2 copyright claims for
purposes of apportionment).
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Tellingly, while MGA argues that all of Mattel's claims are inextricably
intertwined with the Bratz copyright claim, stating "[f]rom the very beginning, this was
a copyright case" (Mot. at 1), when Bryant removed Mattel's April 2004 Complaint on
federal question and diversity grounds, the Court found no complete preemption under
the Copyright Act—it found that Mattel's state law claims did not arise under copyright
law. Dkt. 180 at 14-17 (04-9059). As the Court recognized then, Mattel's April 2004
Complaint did not identify MGA, Larian or Bratz; it did not allege that Mattel owns
Bratz; and it certainly did not allege that the Bratz dolls infringed the Bratz drawings
that Mattel owns. MGA argues that the state law claims asserted in April 2004 "were a
means for Mattel to acquire the copyright in Bryant's work" (Mot. at 2), but Mattel
claimed ownership of the Bratz works through assignment or the work-made-for-hire
statute, not through its common law claims. MGA argues that Mattel's relation back
allegations establish that the copyright and common law claims are related for
apportionment purposes (Mot. at 2), but California's relation back doctrine is irrelevant
to the interpretation of § 505. Entm't Research Group, 122 F.3d at 1230. And while
MGA relies on the Court's preemption rulings to establish that the common law claims
are related to the Bratz copyright claim (Mot. at 2), these rulings actually prove the
opposite: Mattel's common law claims were not based on the same facts as the
copyright claims the ownership and exploitation of Bratz works because claims
based on such facts would be preempted.
MGA has demanded that Mattel pay for its defense of every claim and even for
its assertion of its own claims without any attempt at apportionment. This is wholly
improper. Because the January 2007 Bratz copyright claim is unrelated to the April
2004 common law claims for apportionment purposes, and in fact had not even been
asserted when those claims were filed, MGA is not entitled to the nearly in
claimed attorney's fees and costs incurred before January 2007. For fees incurred after
that date, MGA must apportion. MGA argued in August 2010 that its "discovery in
Phase 1 and Phase 2 has not focused on these [Bratz trade secret] allegations." Dkt.
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8634 at 7. In light of that representation, MGA bears a heavy burden to justify any fees
for the period between January 2007 and September 2010—when Mattel's motion to
confirm was granted. MGA must apportion all fees incurred since, and must produce
records that will allow both Mattel, the Discovery Master and the Court to review the
accuracy of the records and of the proposed apportionment.
C. Even Without Apportionment Or Billing Descriptions, MGA's
Demand For In Attorney's Fees And Costs Is Grossly
Excessive
Even without apportionment or billing descriptions, MGA's demand is clearly
unreasonable and excessive. "Hours that are not properly billed to one's client also are
not properly billed to one's adversary pursuant to statutory authority." Copeland v.
Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980). "The Court must exclude from the
lodestar amount hours that are not reasonably expended because they are excessive,
redundant, or otherwise unnecessary." Rodriguez v. Del Taco, Inc., 2002 WL
32987532, at *2-*3 (C.D. Cal. Jan. 10, 2002) (Carter, J.) (citing Hensley, 461 U.S. at
433). There are certain entries, or sets of entries, that stand out as unreasonable and
improper, even on the limited record presented.
O'Melveny & Meyers ("OMM"). MGA has included in its motion
in attorney's fees incurred by a firm that MGA has sued for overbilling for work that
was "never performed, took less time than actually billed, or was meaningless 'busy'
work which provided little or no value to the effort in the underlying legal actions."
See MGA's Cross-Complaint in O'Melveny & Myers vs. MGA, Case No. BC441593,
Superior Court of California, County of Los Angeles Central Division, filed August 5,
2010 ("MGA Cross-Complaint") at 1[47, Searcy Dec. Ex. 23. MGA's pleading details
OMM's alleged "misrepresent[ation of] the qualifications and experience [of lead
counsel]," "improper[] staffing," "egregious overbilling," "inefficienCies by virtue of a
lack of direction, oversight, coordination and review," "vague billing statements,"
"[c]harging and collecting unreasonable costs in excess of the costs O'Melveny
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expended or incurred for the underlying legal actions," "fraudulent[] overbilling," and
"[t]hrowing countless bodies of legal personnel at the MGA case, resulting in
inefficiencies by virtue of a lack of direction." Id.; MGA's Case Management
Statement in O'Melveny & Myers vs. MGA, Case No. BC441593, Superior Court of
California, County of Los Angeles Central Division, filed August 5, 2010 ("MGA
CMS") at 8 (April 29, 2011), Searcy Dec. Ex. 24. "MGA's claim," according to the
state court hearing it, is "that it was overbilled for work O'Melveny performed that was
ineffective, inappropriate, unnecessary, duplicative or wasteful." Notice of Ruling in
O'Melveny & Myers vs. MGA, Case No. BC441593, Superior Court of California,
County of Los Angeles Central Division, filed (Nov. 17, 2010) ("Notice of Ruling"),
Searcy Dec. Ex. 25. Yet MGA insists that Mattel pay fees that MGA contends "are
improper, bloated, excessive, unreasonable or even false." MGA Cross-Complaint at ¶
50 (emphasis added).
Skadden. MGA also argues that Mattel should pay for in attorney's
fees incurred by Skadden even though MGA's malpractice claim includes allegations
that Skadden engaged in duplicative, wasteful, and unnecessary ramp-up work caused
by OMM's "fail[ure] and refus[al] to meaningfully assist Skadden during the
transition." MGA Cross-Complaint at ¶ 38. According to MGA, "O'Melveny's and
Cross-Defendants [] conduct cost MGA millions of dollars in additional and
unnecessary fees and costs as Skadden struggled to get up to speed, organize the file
and correct O'Melveny's mistakes." Id. at ¶ 40 (emphasis added). Mattel should not
pay for "Skadden to recreate the case files that O'Melveny had in its possession." Id.
at ¶ 39 (emphasis added); see also MGA's Case Management Statement in O'Melveny
& Myers vs. MGA, Case No. BC441593, Superior Court of California, County of Los
Angeles Central Division, filed August 5, 2010 ("MGA CMS") at 5 (April 29, 2011);
see Earthquake Sound Corp. v. Bumper Indus., 352 F.3d 1210, 1219 (9th Cir. 2003)
27 ("[I]t is appropriate for a district court to reduce duplicative fees when awarding
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attorney's fees."); Oskar Sys., LLC v. Club Speed, Inc., 2010 WL 4235812, at *3 (C.D.
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Cal. Oct. 20, 2010) (reducing defendants' requested "getting up to speed" attorneys' fee
award by one-third where there was "an indisputable overlap of time and ensuing
inefficiency given that prior counsel was replaced").
Other Firms. MGA has shuffled through dozens of lawyers on this; it is seeking
reimbursement for fees paid to 13 separate firms. Schultz Dec. at 74-8, 10-12. The
waste and need for duplication associated with hiring multiple separate firms is
obvious. Mattel should not have to pay for that waste and duplication.
Other Examples. Mattel is reluctant to present anything which might resemble
a comprehensive list of exclusions precisely because no such list is possible without
more detailed records. But certain issues clearly present themselves which will need to
be addressed in light of those records. For example:
• Despite the Court's warnings, MGA filed for summary judgment prior
to the close of discovery in May 2010—papers which the Court struck
as premature even though MGA "seem[ed] to have expended
considerable time and effort in the preparation and submission of the
dispositive motions." 12 The Court found that "the instant motions are
remarkable precisely because the MGA Parties previously requested a
July 23, 2010 deadline for summary judgment motions," and that the
"Court's consideration of the arguments in favor of summary judgment
detracts from the Court's interest in a just, speedy, and inexpensive
resolution of this lawsuit." 13
• Rather than proceed to trial, MGA chose to file a frivolous mandamus
petition seeking to overturn the Court's orders disqualifying its
conflicted counsel and requiring it to proceed to trial, after having made
the decision to hire a former Quinn Emanuel attorney who worked for
Mattel on this case (Jill Bassinger) all of which required lengthy,
expensive proceedings both before the Court and the Court of Appeals.
12 Order Striking as Premature and Denying Without Prejudice MGA Parties'
Motions for Summary Adjudication; Denying Mattel's Ex Parte Application, dated
May 13, 2010, at 3 (BDocket No. 7854).
13 Id. at 3-4.
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See, e.g., MGA's Opposition to Mattel's Inc.'s Motion to Disqualify
Glaser Weil, Dkt. 9407; Hearing Tr., Motion to Disqualify Glaser Weil
Firm, Dec. 20, 2010, Vol. 1 - 3; Hearing Tr. on Motion to Disqualify
Glaser Weil Firm, Dec. 21, 2010, Vol. 1-3; MGA's Opening Brief
and/or Petition for Writ of Mandamus to the 9th Circuit.
• Before that, MGA, acting through the Skadden firm, decided to hire a
former Mattel employee who worked with the legal department at
Mattel (Christina Tomiyama) as an "expert" prior to the Phase 1 trial,
and disclosed privileged Mattel information in Tomiyama's expert
report. This led to another costly round of disqualification proceedings
on which Mattel prevailed. See, e.g., MGA's Response in Opposition
to Disqualify, dated March 31, 2008; MGA Parties' Memorandum of
Points and Authorities in Opposition to Mattel's Motion in Limine No.
15, dated May 2, 2008 (opposing Mattel's Motion in Limine to exclude
testimony of Ms. Tomiyama); Hearing Tr., April 7, 2008 at 4:16-97:23.
• MGA spent long hours working with the Court-appointed receiver and
forensic auditor in Phase 1 judicial officers appointed by the Court
not based on Mattel's copyright claim, but based on MGA's
documented gamesmanship with its financials—gamesmanship that
caused the Court to declare that it found MGA's finances a "mystery."
Dkt. 4657 at 2 (appointing forensic auditor "[fl or good cause shown");
Dkt. 5168 at 1-2 (ordering production of documents to forensic
auditor).
• MGA expended significant resources moving for terminating sanctions
in 2007, efforts the Court rejected as "rhetoric laced with hyperbole" I4
and "sheer speculation, unsupported by evidence". I5
• Just last week, MGA filed a 33-page JMOL on Mattel's UCL and
intentional interference claims. Dkt. 10535. It did this even though
Mattel had already made clear that it was not pursuing UCL relief in
light of the jury's verdicts and even though Mattel never had any
intention of seeking a judgment on its intentional interference claim in
14 Order Denying Motion for Terminating Sanctions, dated August 27, 2007, at 4
(Dkt. 895).
15 Id.
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light of the jury's findings on timeliness. Dkt. 10535 at 17 ("In light of
the jury verdict, Mattel has informed the Court that 'Mattel is not
seeking further relief under the UCL . . . .'") (quoting Dkt. 10532 at 1).
Rather than email counsel to confirm Mattel's non-opposition, MGA
instead spent tens of thousands of dollars drafting an unnecessary
motion—and presumably intends to send Mattel the bill.
Finally, both parties will no doubt argue that the other engaged in discovery
abuse. At this point, it is no longer a contest, but a question of whether such conduct
should disqualify MGA from receiving fees or at least limit the fees it receives. $ee
Harris Custom Builders, Inc. v. Hoffmeyer, 140 F.3d 728, 731 (7th Cir. 1998) ("If the
district judge is convinced that Hoffmeyer was, in fact, a party to destruction of
evidence, as Harris alleges, or any other sanctionable conduct, that conduct should be
considered in determining the amount of a fee award, or indeed in deciding whether
fees should be awarded at all. Unfortunately, sometimes the prevailing party will also
be a party who misbehaved during the course of the litigation. We make no judgment
whether that is true here, but if it is, the conduct should be considered."). Only when
detailed billing records can be compared with the motions and disputes to which they
relate will a proper evaluation and appropriate allocation be possible.
D. Should The Court Decide To Award Fees, It Should Reduce Them
The Court always has discretion to reduce attorney's fees. Should the Court
decide—contrary to Mattel's arguments, and even to its Order requiring MGA to
submit more detailed records—to make its decision based on the current record, then
Mattel respectfully respects that the Court exercise its discretion to reduce substantially
the award from that requested. See Trustees of Directors Guild of America-Producer
Pension Benefits Plans v. Tise, 234 F.3d 415, 427 (9th Cir. 2000) ("Where the
documentation is inadequate, the district court is free to reduce an applicant's fee award
accordingly."); Dr. JKL Ltd. v. HPC IT Education Center, 749 F. Supp. 2d 1038, 1052
(N.D. Cal. 2010) (reducing attorney's fees claimed by plaintiff where plaintiff
submitted a billing sheet that omitted "any explanation of the tasks performed"); T-Peg.,
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Inc. v. Vermont Timber Works, Inc., 2010 WL 3895715, at *5-6 (D. N.H. Sept. 30,
2010) (awarding 15% of requested amount because "having presided over this lengthy
litigation, and having observed the often unnecessary and unproductive contentiousness
between the parties, [the judge] conclude[d] that a discretionary award of partial
attorney's fees as described above is fair and adequate.").
III. MATTEL IS ENTITLED TO SET-OFF ATTORNEY'S FEES
INCURRED IN DEFENSE OF MGA'S LANHAM ACT CLAIMS
To the extent the Court awards attorney's fees to MGA, Mattel is entitled to set-
off attorney's fees that Mattel incurred in its successful defense of MGA's Lanham Act
claims, which were groundless. 15 U.S.C. § 1117(a); Stephen W. Boney, Inc. v. Boney
Services, Inc., 127 F.3d 821, 827 (9th Cir. 1997) ("When a plaintiff's case is
groundless, unreasonable, vexatious, or pursued in bad faith, it is exceptional, and the
district court may award attorney's fees to the defendant.") (quoting Scott Fetzer Co. v.
Williamson, 101 F.3d 549 (8th Cir. 1996)). A finding of bad faith is not necessary to
award attorney's fees under the Lanham Act. Id.
MGA abandoned the bulk of its trade dress claims after forcing Mattel to expend
millions of dollars in discovery over a four-year period. Dkt. No. 10452. The only two
trade dress claims that MGA did not abandon Bratz trapezoidal packaging and 4-Ever
Best Friends heart-shaped packaging—were rejected during summary judgment.
"[T]oys, and even dolls, have been sold in trapezoids for decades," and [t]he heart is a
'common, basic shape, similar to a geometrical design." Dkt. 9600 at 98, 100.
IV. MGA IS NOT ENTITLED TO "FULL COSTS" UNDER THE
COPYRIGHT ACT
Finally, MGA seeks to recover costs of more than under the
Copyright Act, in addition to fees. As with attorney's fees, the decision to award costs
under § 505, and the amount of any such award, is discretionary. See Perfect 10, Inc. v.
CCBill LLC, 488 F.3d 1102, 1120-21 (9th Cir. 2007) (denying both costs and fees).
The same arguments detailed earlier govern here: Mattel's litigation position was
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objectively reasonable, and it did not act in bad faith. If any costs at all are to be
awarded, they should be apportioned. MGA has neither offered such records nor
provided sufficient detail that Mattel and the Court can do the necessary review. For
example, MGA seeks to recover in fees for "Experts & Consultants"
(Schultz Dec. ¶IJ 35-52) even though only one of them, Peter S. Menell, is identified as
an expert in copyright (Schultz Dec. ¶ 43)—and MGA abandoned him long before trial.
Similarly, MGA seeks to recover in costs for Discovery Masters and
electronic discovery consultants (Schultz Dec. TT 20, 22, and 23) and in
costs for "Electronic Document Processing, Case Hosting and Database Management"
(Schultz Dec. IN 31-34) without any showing of which, if any, of these costs relate to
defending Mattel's copyright claim as opposed to defending or pursuing other claims.
As with its attorney's fees, MGA has failed to (1) apportion its costs between its
defense of Mattel's copyright and non-copyright claims and (2) provide detailed work
descriptions to establish that the costs incurred were reasonable and necessary and to
allow Mattel an opportunity to challenge them.
Conclusion
For all these reasons, Mattel requests that the Court deny MGA's motion for
attorney's fees and costs under the Copyright Act.
DATED: May 12, 2011 QUINN EMANUEL URQUHART &
SULLIVAN, LLP
Michael T. Zeller
Attorneys for Mattel, Inc.
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