weighing the parties' relative financial strength as one among several factors in determining whether to award feesSummary of this case from Penguin Books v. New Chrn. Church Full Endeavour LTD
98 Civ. 7128 (BSJ), 98 Civ. 7129 (BSJ), 98 Civ. 7130 (BSJ)
March 30, 2003
OPINION AND ORDER
This motion for attorneys' fees and costs is before the Court following its September 18, 2001 decision granting summary judgment to Defendants Cable News Network, Inc., LP, LLLP d/b/a CNN ("CNN"), American Broadcasting Network ("ABC") and CBS Corporation ("CBS").
In this action, Plaintiff Video-Cinema Films, Inc. ("Video-Cinema") asserted a claim for copyright infringement under 17 U.S.C. § 101 and for common-law unfair competition against CNN, ABC and CBS (collectively, "Defendants"), for their nationwide broadcasts of excerpted footage from the motion picture " The Story of G.I. Joe" (" G.I. Joe") after the death of actor Robert Mitchum, who had appeared in that film. Plaintiff claimed that Defendants violated the Copyright Act when they broadcasted this footage as part of an obituary for the actor. In granting summary judgment in favor of Defendants, this Court found that Defendants produced news reports that served the public interest in accordance with the Copyright Act's fair use provision. This Court specifically noted that the public would be hindered by denying Defendants' fair use defense and that the obituaries in question contained information which, if the general public did not find interesting, at the very least movie aficionados across the country would find informative.
Plaintiff filed three separate actions, one against each Defendant, which were never formally consolidated. In an effort to conserve resources, however, Defendants have conducted this litigation jointly wherever possible. With regard to attorneys' fees, Defendants believe that the question of whether fees and costs should be awarded is the same for all Defendants. However, both the factual and legal issues related to the amount each Defendant should be awarded will likely be different. consequently, Defendants have brought one joint motion to first address the right to fees, which will be followed by separate petitions concerning the specific amounts requested, should the court grant the motion. As such, Defendants request that the court award fees and costs pursuant to 17 U.S.C. § 505, as well as enter an Order containing a schedule for each Defendant to separately present a precise calculation of each Defendant's fees and costs.
On October 17, 2001, Defendants filed this motion to recover attorneys' fees and costs pursuant to 17 U.S.C. § 505, as the prevailing parties in these related copyright infringement actions.
Pursuant to Section 505 of the Copyright Act, the Court "may . . . award a reasonable attorney's fee to the prevailing party as part of the costs." 17 U.S.C. § 505. It is within the Court's discretion whether or not to grant such an award. Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994). While there is no precise rule or formula for the Court to follow in exercising this discretion, some of the factors the Court may consider are "frivolousness, motivation, objective unreasonableness (in both the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence". Id. at 534 n. 19; Matthew Bender Co. v. West Pub. Co., 240 F.3d 116, 121 (2d Cir. 2001). of these factors, objective unreasonableness is a significant factor and should be given substantial weight in determining whether fees are warranted. Matthew Bender Co. 240 F.3d. at 122; Earth Flag Ltd. v. Alamo Flag Co., 154 F. Supp.2d 663, 666 (S.D.N.Y. 2001). Thus, the Court may award attorney's fees solely upon a showing that Plaintiff's position is objectively unreasonable. See Adsani v. Miller, No. 94 Civ. 9131, 1996 WL 531858, *13 (S.D.N.Y. Sept. 19, 199). In appropriate cases, however, the presence of other factors may justify an award despite a finding that the party's arguments were reasonable. Matthew Bender Co., 240 F.3d at 122. Ultimately, all of these factors are subservient to the broader question of whether an award of fees furthers the policies of the Copyright Act. Id. at 121.
Plaintiff's Opposition to Attorneys' Fees
In Plaintiff's opposition to Defendants' motion for attorneys' fees, Plaintiff never addresses the merits of Defendants' arguments for attorneys' fees. Instead, in Point One of its opposition to Defendants' motion for attorneys' fees, Plaintiff challenges this Court's jurisdiction to consider Defendants' application for attorneys' fees' on the ground that it is untimely because the case was closed when Defendants made this motion.
In one sentence, Plaintiff provided its only substantive defense to Defendants' motion for attorneys' fees. Plaintiff stated that Defendants failed to "prove the Plaintiff acted unreasonably, particularly when fair use has been rejected as a defense where news organizations used clips which they customarily pay for" and cited Los Angeles News Service v. Reuters Television Int'l, Ltd., 149 F.3d 987 (9th Cir. 1998). Los Angeles News Service, however, is easily distinguishable from this case and is of no help to Plaintiff.
Fed.R.Civ.P. 54(d)(2)(B) reads in pertinent part: "Unless otherwise provided by statute or court order, [a] motion [for attorneys' fees] must be filed and served no later than 14 days after entry of the judgment. . . ." For purposes of Fed.R.Civ.P. 54, the 14-day statute of limitations does not begin to run until the date the judgment is entered by the Clerk of the Court, here October 3, 2001. See Gardner v. Catering by Henry Smith, Inc., 205 F. Supp.2d 49, 51 (E.D.N.Y. 2002); see also Independent Living Aids v. Maxi-Aids Inc., 208 F. Supp.2d 387, 395 (E.D.N.Y. 1998); Fase v. Seafarers Welfare Pension Plan, 79 F.R.D. 363, 364 (E.D.N.Y. 1978). Because Defendants' filed their motion for an award of attorneys' fees on October 17, 2001, within 14 days of the entry of the judgment, Defendants' motion for attorneys' fees was timely pursuant to Fed.R.Civ.P. 54(d)(2)(B).
Additionally, Plaintiff asserts that Defendant CNN is barred from joining in the present motion for an award of attorneys' fees and costs because CNN made a prior request for attorney's fees in its motion for summary judgment, which was not addressed in the court's Opinion and Order of September 28, 2001. Because the court did not rule on the initial fee request made by CNN in its summary judgment motion, the court will not preclude Defendant CNN from pursuing their request for attorneys' fees and costs in this current motion.
In Point Two, its final point in opposition to Defendants' motion for attorneys' fees', Plaintiff requested that the Court sanction Defendants for allegedly filing documents containing false and misleading statements under 28 U.S.C. § 1927. This claim is without merit and is an example of the frivolous nature of Plaintiff's arguments. Defendants' Notice of Motion was correctly dated and file stamped October 17, 2001. The certificates of service and the last page of the memorandum of law were incorrectly dated September 17, 2001. As a result, Plaintiff contends that Defendants backdated these documents in an attempt to mislead the Court. Defendants claim it was merely a typographical error, which is obviously correct. Were the Court to credit Plaintiff's argument, Defendants would have submitted their fee application before the Court issued its judgment.
Plaintiff has utterly failed to advance any meritorious reason in opposition to the Defendants' application for their legal fees and costs pursuant to 17 U.S.C. § 505. Accordingly, for this reason and for the additional reasons set forth below, the Court grants Defendants' motion for attorneys' fees and costs.
Objective Unreasonableness of Plaintiff's Position
Throughout the underlying litigation, Plaintiff made objectively unreasonable factual and legal arguments. For instance, Point One of Plaintiff's brief in opposition to Defendants' motion for summary judgment was that Defendants' motions were based on unsworn statements by counsel, not supported by personal knowledge. As noted in this Court's decision, this argument was without merit and the affidavits in question were in fact made from the personal knowledge of the declarant or affiant. Furthermore, Defendants' attorneys' declarations did not contain allegations in support of their motions, but simply attached exhibits in support of their statements of facts and memoranda of law. These facts were clear from even a cursory reading of the declarations and affidavits. As such, Plaintiff's argument was objectively unreasonable.
With respect to Defendants' fair use defense, Plaintiff first generally asserted that the fair use defense must fail because the use of copyrighted material must be "essential" or an actual "necessity" to qualify as fair use. Plaintiff claimed that Defendants' use of the film footage did not meet this requirement because Defendants could have used still photos of Mitchum from the public domain instead of the film clip. None of the authority cited by Plaintiff, however, stood for the proposition that any use of the copyrighted material must be essential or an actual necessity to qualify as fair use. In fact, the portions of the opinions upon which Plaintiff relied to support this proposition did not even address the fair use doctrine, but instead concerned whether a First Amendment privilege extends the use of copyright material beyond what is permitted by the fair use defense. See Roy Export Company Establishment of Vaduz, Liechtenstein v. Columbia Broadcasting System, Inc., 672 F.2d 1095, 1099-1100 (2d Cir. 1982); Harper Row Pub., Inc. v. Nation Enterprises Inc., 471 U.S. 539, 555-560 (1985). Accordingly, Plaintiff's argument that use of copyrighted material must be essential or an actual necessity to constitute fair use was objectively unreasonable.
Plaintiff's arguments relating to the fair use factors were equally deficient. Plaintiff's assertion, for example, that Defendants' use of the movie clip was substantial was wholly unreasonable, especially in comparison to the overall length of the film. Defendants' use of the clips ranged from 6-22 seconds, or less than 1 percent of the 108 minute long film. The Second Circuit has consistently found fair use in cases where only a small' portion of the original work was used. See Arica Institute, Inc. v. Palmer, 970 F.2d 1067, 1078 (2d. Cir. 1992); Wright v. Warner Books, Inc., 953 F.2d 731, 738-739 (2d. Cir. 1991); New Era Publications, Int'l v. Carol Pub. Group, 904 F.2d 152, 158 (2d. Circuit 1990); Maxtone-Graham v. Burthehaell, 803 F.2d 1254, 1263 (2d. Cir. 1986); see also Hofheinz v. A E Television Networks, 146 F. Supp.2d 442, 448 (S.D.N.Y. 2001). Moreover, a de minimis infringement of a copyrighted work is not actionable. Sandoval v. New Line Cinema Corp., 147 F.3d 215, 217 (2d Cir. 1998). Therefore, Plaintiff's argument was objectively unreasonable.
The court examined the following four factors in determining that Defendants' use of the film footage constituted a fair use: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. 17 U.S.C. § 107.
Also objectively unreasonable was Plaintiff's argument that the clips used by Defendants constituted the "heart" of the film. The information that Plaintiff claimed made the scene in question important was not conveyed by the small fraction of the scene used by Defendants. Furthermore, Defendants use was reasonable in relation to the purpose of the copying. Defendants' obituaries sought to effectively detail Mitchum's career, which is a task that required some exhibition of actual movie clips. The clips used by Defendants related solely to Mitchum's performance and did not reflect the entire movie.
With respect to the effect on the potential market, Plaintiff conceded that Defendants' obituaries did not compete with or supercede the market for the entire film. Instead, Plaintiff argued that Defendants' use of the film footage deprived Plaintiff of a market for licensing film clips to news organizations for use in obituaries. "[P]laintiff's argument, if carried to its logical conclusion, would eviscerate the affirmative defense of fair use since every copyright infringer seeking the protection of the fair use doctrine could have potentially sought a license from the owner of the infringed work." Hofheinz v. AMC Productions, Inc., 147 F. Supp.2d 127, 140 (E.D.N.Y. 2001). Moreover, Plaintiff failed to establish that any such market for licensing film clips for obituaries ever existed. As this Court noted in its Opinion and Order, in Stern's 38 years in the industry, he received only 3 small payments for the use of film clips in obituaries, and these were settlement payments in order to avoid litigation. Accordingly, this Court finds Plaintiff's argument with respect to this factor was objectively unreasonable.
With respect to the nature of the copyrighted work, the Court found this factor to be neutral, or at best, to slightly favor against a finding of fair use, as G.I. Joe is a creative work that entitles it to greater copyright protection than factual works. In addressing this factor, however, Plaintiff argued that G.I. Joe had only a limited publication under the 1909 Copyright Act, as opposed to a general publication. As this Court noted, the fair use doctrine is concerned only with whether the work is published at all, and the distinction between general and limited publication is irrelevant. See Harper Row, 471 U.S. at 555. Accordingly, Plaintiff's argument with respect to this factor was unreasonable.
Plaintiff's argument under the first factor, the purpose and character of use, is arguably reasonable. Plaintiff was correct that Defendants are for-prof it commercial enterprises, which although not dispositive, may weigh against a finding of fair use. Plaintiff, however, also argued that Defendants' use of the film footage was not transformative. As this Court noted in its Opinion and Order, Defendants used the film footage as part of their obituaries to inform the public of Mitchum's impact on the arts and because of the film's relevance to Mitchum. This use was for an entirely new purpose than the original film and clearly did not supercede G.I. Joe.
As discussed in this Court's September Opinion, Plaintiff's President and sole shareholder, Larry Stern, devised an elaborate scheme to place himself in a position to sue the Defendants. It is undisputed that at the time the Defendants broadcasted the obituaries in question, Plaintiff did not own G.I. Joe, but was interested in buying it. Despite the fact that Plaintiff did not own the copyright, Stern, anticipating that news organizations would air Mitchum obituaries that would almost certainly include G.I. Joe because of its significance to Mitchum's career, spent ten hours watching television on the day of Mitchum's death trying to find as many potential targets of litigation as possible in the event that Plaintiff was able to buy the copyright to the film.
Ultimately, Plaintiff did buy the copyright to the film, making sure that it received the rights to pursue infringement actions retroactively. Plaintiff then immediately began issuing numerous demand letters to the news organizations. According to Defendants, Plaintiff sent letters to approximately twelve different news organizations requesting payments of $5,000 or $10,000 each for the use of G.I. Joe in their Mitchum Obituaries. Some of these news organizations, however, had never even aired any footage of G.I. Joe. All of the news organizations that had aired footage of the film responded that their use of the footage was fair.
Plaintiff's conduct was nothing more than an obvious effort to use the Copyright Act to secure payment from Defendants for their fair use of the film footage. As such, Plaintiff's motivation was improper and weighs in favor of an award of attorneys' fees for Defendants.
Financial Strength of the Parties
Another factor to be considered in awarding fees under the Copyright Act, not mentioned by the Supreme Court in Fogerty, is the relative financial strength of the parties. Torah Soft Ltd. v. Drosnin, No. 00 Civ.5650, 2001 WL 1506013, *6 (S.D.N.Y. Nov. 27, 2001) (citations omitted). Because neither Plaintiff nor Defendants have addressed this factor, the Court will consider this factor neutral in determining whether to award fees to Defendants.
Promoting the Purpose of the Copyright Act
Having found that Plaintiff was improperly motivated to bring this copyright action and that Plaintiff's position was objectively unreasonable, the Court is persuaded that fees are appropriate in this case to deter future copyright owners from using the threat of litigation to chill other fair uses. To hold otherwise would diminish any incentive for defendants to incur the often hefty costs of litigation to defend the fair use doctrine. As the Supreme Court in Fogerty explained, "copyright law ultimately serves the purpose of enriching the general public through access to creative works. . . ." Fogerty, 510 U.S. at 527. The Court further stated
defendants who seek to advance a variety of meritorious copyright defenses should be encouraged to litigate them to the same extent that plaintiffs are encouraged to litigate meritorious claims of infringement . . . Thus, a successful defense of a copyright infringement action may further the policies of the Copyright Act every bit as much as a successful prosecution of an infringement claim by the holder of a copyright.Id.
This Court finds that this is a case where a successful defense of a copyright infringement action may further the policies of the Copyright Act. Fogerty, 510 U.S. at 527. Thus, the award of the attorneys' fees is justified.
For the foregoing reasons, Defendants' motion for reasonable costs and attorneys' fees pursuant to 17 U.S.C. § 505 is granted. Plaintiff's cross-motion for sanctions and costs in defending against this motion is denied.
Defendants are directed to submit to the Court, on or before April 18, 2003, the precise calculation of fees and costs that each Defendant is seeking.