Attorney Fee Awards in Infringement Cases
Section 505 of the Copyright Act allows the court to "award a reasonable attorney's fee to the prevailing party as part of the costs." An award of attorney fees is a matter of the court's discretion. Fogerty v. Fantasy, Inc., 510 U.S. 517, 533 (1994), and Section 505 "grants courts wide latitude to award attorney's fees based on the totality of circumstances in a case." Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979, 1985 (2016). In deciding whether to award fees under the Copyright Act, the district court should consider, among other things: "the degree of success obtained on the claim; frivolousness; motivation; objective reasonableness of factual and legal arguments; and need for compensation and deterrence." Maljack Prods., Inc. v. GoodTimes Home Video Corp., 81 F.3d 881, 889 (9th Cir. 1996). Some circuit courts also consider "whether the chilling effect of attorney's fees may be too great or impose an inequitable burden on an impecunious plaintiff." Ets-Hokin v. Skyy Spirits, Inc., 323 F.3d 763, 766 (9th Cir. 2003). The relevant factors should all be considered in equal measure given the circumstances of the case "so long as such factors are faithful to the purposes of the Copyright Act and are applied to prevailing plaintiffs and defendants in an evenhanded manner." Fogerty, 517 U.S. at 534 n.19. "Faithfulness to the purposes of the Copyright Act is, therefore, the pivotal criterion." Fantasy, Inc. v. Fogerty, 94 F.3d 553, 558 (9th Cir. 1996). "The primary objective of the Copyright Act is to encourage the production of original literary, artistic, and musical expression for the good of the public." Fogerty, 510 U.S. at 524.
After last year's Supreme Court decision in Kirtsaeng, courts should now give substantial weight to the objective reasonableness of the losing party's position in analyzing fee requests. 136 S. Ct. at 1983. The Kirtsaeng court tempered this admonition by cautioning that "objective reasonableness can be only an important factor in assessing fee applications—not the controlling one." Id. at 1988. "That means in any given case a court may award fees even though the losing party offered reasonable arguments (or, conversely, deny fees even though the losing party made unreasonable ones)." Id. "Although objective reasonableness carries significant weight, courts must view all the circumstances of a case on their own terms, in light of the Copyright Act's essential goals." Id. at 1989.
"For example, a court may order fee-shifting because of a party's litigation misconduct, whatever the reasonableness of his claims or defenses." Id. at 1988–89 (citing Viva Video, Inc. v. Cabrera, 9 Fed.Appx. 77, 80 (2nd Cir.2001)). "Or a court may do so to deter repeated instances of copyright infringement or over aggressive assertions of copyright claims, again even if the losing position was reasonable in a particular case." Id. at 1989. A party's repeated instances of copyright infringement and its significant litigation misconduct can also be the basis for an award of fees. Id. While Kirtsaeng clarified the specific test for district courts to use when determining when to award fees, the analysis is still fact-specific and case-by-case. In making a request for fees—or opposing one—the key factors to emphasize are (1) whether an award of fees will further the purposes of the Copyright Act, and (2) the reasonableness (or unreasonableness) of the party throughout the litigation.
Other Avenues for Attorney Fees in Copyright Litigation
A party who may be unable to recover its attorney fees under Section 505 for infringement may have other avenues for a fee award. Section 1202 of the Digital Millennium Copyright Act allows recovery of fees in cases where the infringer has (a) removed or altered copyright management information (including copyright notices and watermarks or (b) distributed a work of art with knowledge that the copyright management information has been removed or altered. 17 USC §1202. Under the Visual Artists Rights Act, 17 U.S.C. § 106A(a), an artist who created a visual work has the right to attribution and to preserve the integrity of the artist's work, and may receive an award of fees for violations of this section without having registered the work. Finally, a well-drafted contract, whether a license or conditional assignment, that incorporates provision allowing for the artist to recover fees should the artist be forced to litigate use of the artwork being licensed or assigned.
Considering the cost of copyright litigation, especially when compared to actual damages in many cases, the ability to recover attorney fees can change the dynamic of the litigation's course. Litigators serve their clients well by evaluating both their own ability to recover fees and their adversaries' possible recovery early in the case.