District court awards attorneys’ fees to plaintiff in copyright action where defendant engaged in willful infringement and manipulated evidence at trial, following court’s earlier decision to award more than $3 million in statutory damages to plaintiff.
Following a bench trial, the district court in December 2016 found that defendant Telewizja Polska S.A. (TVP) intentionally infringed copyrights in 51 registered television episodes held by plaintiff Spanski Enterprises Inc. (SEI). TVP circumvented territorial restrictions to make these episodes (and thousands of other unregistered episodes) available in the United States, despite SEI’s exclusive copyrights over display of these episodes in the U.S. In February 2017, the court awarded statutory damages of $3.06 million to SEI, at a rate of $60,000 per episode. SEI sought attorneys’ fees and costs of approximately $900,000 as the prevailing party pursuant to Section 505 of the Copyright Act, which the court granted subject to minor modifications of the amount sought.
Under the Copyright Act, courts have discretion to award attorneys’ fees based on the totality of the circumstances of a given case. Here the district court noted the Supreme Court’s recent pronouncement on statutory attorneys’ fees in Kirtsaeng v. John Wiley & Sons, Inc. (2016) — that while the “objective reasonableness” of a losing party’s position has “significant weight” in deciding whether to award attorneys’ fees, it is not a controlling factor. Although SEI asserted that TVP’s defenses in the action were objectively unreasonable, such as TVP’s argument that a technological error caused the access to the infringing episodes, the court found that TVP presented “serious defenses and arguments” that were not frivolous or objectively unreasonable. The court found an award of attorneys’ fees justified for other reasons, however.
The court found that TVP “engaged in egregious litigation misconduct” when TVP intentionally manipulated evidence for submission to the court, including removing the infringing works from its distribution system, altering the formatting of the videos so it appeared they did not infringe, and submitting a screenshot of the changed formats to argue that TVP had not infringed SEI’s copyrights. The court noted that this behavior frustrated the goals of the Copyright Act by undermining the judicial process that is a key part of the copyright enforcement system. The court applauded the efforts of SEI and its counsel in revealing TVP’s litigation misconduct, and noted that an award of attorneys’ fees was justified to compensate those efforts. In addition, awarding attorneys’ fees against TVP would further the goal of deterring willful copyright infringement by TVP or other potential infringers in the future.
SEI’s counsel requested approximately $905,000 in attorneys’ fees and costs from January 2012 through January 2017. The court found that the hourly rates billed by plaintiff’s attorneys were reasonable as they aligned with prevailing rates in the “relevant community,” taking into consideration that SEI’s counsel “are among the most skilled and experienced attorneys handling intellectual property matters nationwide” and that the case required counsel’s analysis of complex geo-blocking technology. The court found that the hourly rates of paralegals and support staff exceeded prevailing market rates, however, and required plaintiff’s counsel to reduce these hourly rates. The court also found the number of hours billed to be reasonable, with the exception of travel time if legal work was not performed during that time. The court awarded attorneys’ fees to SEI in an amount to be determined.