Why it matters: The U.S. Supreme Court has also chosen to review the standard for awarding a prevailing party in a copyright case its attorneys' fees in Kirtsaeng v. John Wiley & Sons, Inc. The Kirtsaeng case presents what the Petitioner has called a "hopeless" split among the U.S. Circuit Courts of Appeal that, if resolved, may eliminate a venue advantage for plaintiffs in certain jurisdictions.
Detailed discussion: On January 15, 2016, the U.S. Supreme Court granted certiorari in Kirtsaeng v. John Wiley & Sons, Inc., to review the standard for awarding attorneys' fees under Section 505 of the Copyright Act (17 U.S.C. §505).
This is a return trip to the Supreme Court for these parties. In 2013, the Court (reversing the Second Circuit Court of Appeals) held that Kirtsaeng (a Thai national who purchased low cost foreign editions of textbooks outside the United States and sold them in the United States for a profit) did not infringe the copyrights on those textbooks owned by John Wiley because of the "first sale" doctrine. Since that decision, Kirtsaeng (i.e., the prevailing party) has been unsuccessfully attempting to recover his reasonable attorneys' fees incurred in connection with that litigation.
A Split In The Circuits
Section 505 of the Copyright Act provides that a district court "may" award a reasonable attorney's fee to a "prevailing party."
Kirtsaeng argues that a split in the appellate circuits' interpretation of this statute adversely affected the outcome of his fee award (based solely on where he was originally sued). According to Kirtsaeng, he would have: (1) obtained his fees in the Ninth or Eleventh Circuit, because they only ask if the prevailing party's claim or defense furthered the interests of the Copyright Act; (2) been entitled to a rebuttable presumption in favor of recovering his fees in the Fifth or Seventh Circuits; and (3) likely obtained his fees in the Third, Fourth, or Sixth Circuits—which apply the four "non-exclusive" factors set forth in the Supreme Court's 1994 Fogerty v. Fantasy, Inc. decision (i.e., frivolousness, motivation, objective unreasonableness, and considerations of compensation and deterrence).
Kirtsaeng's Brief continues that, unlike the above-mentioned circuits, the Second Circuit (where he was sued) relies on precedent that places "substantial weight" on whether the losing party's claim or defense was "objectively unreasonable" (i.e., whether it was "clearly without merit or devoid of legal or factual basis"). And, the Second Circuit upheld the district court's denial of Kirtsaeng's attorneys' fees (even though many factors weighed in favor of awarding them), because "th[o]se factors did not outweigh the 'substantial weight' afforded to John Wiley and Sons' objective reasonableness." Indeed, according to Kirtsaeng, the Second Circuit has violated the Supreme Court's Fogerty opinion by keying its standard to the "blameworthiness" of the parties and by actually creating a presumption against the award of attorneys' fees (as an "unreasonable" case is one that is, by definition, outside the norm of a usual claim).
Kirtsaeng concludes that the proper standard is that followed by the Ninth and Eleventh Circuits (because it advances the aims of the Copyright Act set forth in Fogerty, including the encouragement of defendants to litigate meritorious copyright defenses so as to demarcate the boundaries of the law as clearly as possible). But, echoing the Court's opinion in Octane Fitness, LLC v. ICON Health & Fitness, Inc. addressing the award of attorneys' fees in patent cases, Kirtsaeng also asserts that the ultimate determination by the district court should be based on the "totality of the circumstances" and take into account any equitable factors that are relevant and "faithful to the purpose of the Copyright Act."
Kirtsaeng's Brief was filed on February 22, 2016. Amicus briefs by Public Knowledge and the Intellectual Property Owners Association have also been filed. Oral argument has been set for April 25, 2016.
Click here to read the Petitioner's Brief in Supap Kirtsaeng dba Bluechristine99 v. John Wiley & Sons, Inc.