In Quantum Sys. Integrators, Inc. v. Sprint Nextel Corp., case no. 1:07-cv-491, 2009 U.S. Dist. LEXIS 98742 (E.D. Va. Oct. 16, 2009), District Judge Liam O’Grady issued an opinion regarding a prior attorney’s fees and costs award that had been remanded in an unpublished opinion by the Fourth Circuit for reconsideration in accordance with Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994) and Rosciszewski v. Arete Assocs., Inc., 1 F.3d 225, 234 (4th Cir. 1993) (endorsing and requiring, respectively, the consideration in making fees and costs awards of the following non-exclusive factors: (1) “the motivation of the parties”; (2) “the objective reasonableness of the legal and factual positions advanced”; and (3) “the need in particular circumstances to advance considerations of compensation and deterrence”). The Quantum opinion is a good refresher on the application of 17 U.S.C. § 505, allowing district courts discretion to award attorney’s fees and costs to prevailing parties in copyright infringement cases, and on the Fourth Circuit’s rubric for determining the reasonableness of attorney’s fees. Quantum had sued Spring for approximately $1.5 million in damages for copyright infringement and fraud.

Although Citicorp initially licensed the software, it discontinued the license, but allegedly induced third parties to continue using it. The district court dismissed the suit for failure to prosecute and ordered plaintiff to pay defendant's legal fees pursuant to 17 U.S.C. § 505. The Seventh Circuit affirmed stating that "a defendant that prevails in copyright litigation is presumptively entitled to fees under § 505."

This is the third such award for a Righthaven defendant and the largest award to date. Previously, another Las Vegas judge awarded another successful defendant approximately $34,000in legal fees after that defendant successfully moved to dismiss Righthaven’s claims for lack of standing.As discussed in our post regarding the award of attorney’s fees to a “prevailing party” under 17 U.S.C. § 505, in granting legal fees to a successful defendant, a court can consider factors such as whether the plaintiff’s claims are frivolous, objectively unreasonable, or if there is a need to advance considerations of compensation to the successful party and deter certain behavior. Here, Judge Hunt found that these factors, among others, “weigh[ed] strongly toward imposition of attorney’s fees against Righthaven.”It remains unclear how Righthaven will proceed.

Radin also did not set forth any reasonable likelihood that additional discovery would lead to useful evidence to support her theories of the defendants’ access to her screenplay. Finally, the Court also upheld the district court’s award of attorneys’ fees to the defendants under 17 USC § 505, as well as the district court’s refusal to impose Rule 11 sanctions on Radin or her counsel for filing a “frivolous” complaint.Practice Note:Just a couple of weeks before The Big C decision, the U.S. Court of Appeals for the Second Circuit, in the precedential case of Alexander v. Murdoch, Case No. 11-4291 (2d Cir., Nov. 13, 2012) (Lynch, J.), reached a similar conclusion on similar facts, finding “no substantial similarity” between a script pitched by the plaintiff (called Loony Ben) and the ABC sitcom Modern Family. The pilot script for Loony Ben featured a character who suffered from psychological ailments in terms of his interactions with family members which (according to Alexander comprised a large, non-traditional, dysfunctional, contemporary American family.

Presidential attention to the costs imposed by infringement suits is important, and much of the enthusiasm for these proposals is well deserved. But sauce for the goose is sauce for the gander, and some of the President’s proposals may have unintended consequences for both defendants and the ability of legitimate tech companies to enforce their patents:Giving district courts more discretion to award attorney’s fees in patent cases The President has proposed making 35 U.S.C. § 285 similar to 17 U.S.C. § 505, which governs the award of attorney’s fees in copyright cases. Specifically, in copyright cases the court has the discretion to “award a reasonable attorney’s fee to the prevailing party as part of the costs,” without needing to find that the case is “exceptional.”

[18]Id.[19] 17 U.S.C. § 505 (2012).[20] Innovation Act § 3.

The court noted that such discretion is also awarded district courts under the Copyright Act. See 17 U.S.C. § 505. The court then determined that the Federal Circuit’s exceptional case framework was inflexibly imposed onto § 285, which is inherently flexible.

The Copyright Act allows a district court to award costs and reasonable attorneys’ fees to the prevailing party in a copyright case. (See 17 U.S.C. § 505). In determining whether to award fees to a prevailing party in a copyright case, courts consider: (1) the motivation of the parties, (2) the objective reasonableness of the legal and factual positions advanced, (3) the need in particular circumstances to advance considerations of compensation and deterrence, and (4) any other relevant factor presented.

This District Court finding was previously affirmed by the 11th Circuit in InDyne, Inc. v. Abacus Tech. Corp., 513 F. App’x 858 (11th Cir. 2013) (unpublished).The case was back before the 11th Circuit after the District Court awarded attorneys' fees based on three findings:(1)InDyne was “objectively unreasonable” in filing a copyright infringement claim while no longer possessing “a copyof the copyrighted material;” (2) InDyne’s motivation for bringing suit was “questionable;” and (3) the purposes of the Copyright Act would be furthered by a deterrence of future litigants suing for infringement without being able to produce the software code.The 11th Circuit noted that under 17 U.S.C. § 505 an award of attorneys' fees was in the court’s discretion.In reviewing the decision for an abuse of discretion, the panel noted that encouraging objectively reasonable claims “the boundaries of copyright law are demarcated as clearly as possible.”

He then moved for approximately $30,000 in attorneys’ fees incurred on appeal. Under 17 U.S.C. § 505 of the Copyright Act, the prevailing party is entitled to an award of reasonable attorneys’ fees. In determining whether to award such fees, the 7th Circuit considers the strength of the prevailing party’s case and relief obtained.