On remand from U.S. Supreme Court’s 2016 decision on attorneys’ fees in copyright cases, district court again denies book reseller’s request for attorneys’ fees.
Graduate student Supap Kirtsaeng, a citizen of Thailand who studied math at Cornell University, discovered that publisher John Wiley & Sons sold nearly identical English language textbooks in Thailand and the United States, except that the textbooks cost significantly less in Thailand. With the help of his family and friends, Kirtsaeng started a profitable business purchasing foreign-edition textbooks from Thai bookstores and reselling them to American students.
Wiley sued for copyright infringement, accusing Kirtsaeng of violating Wiley’s exclusive right to distribute textbooks. Kirtsaeng asserted a defense based on the “first sale” doctrine pursuant to Section 109(a) of the Copyright Act, which generally permits the lawful owner of a copy of a work to dispose of it in any manner. At the time of the lawsuit, the courts were in conflict as to whether the first sale doctrine applied to foreign-made works. The district court and Second Circuit sided with Wiley holding that it does not, but the U.S. Supreme Court reversed, establishing that the first-sale doctrine applies to foreign-made books as well as domestic books. (Read our summary of the Supreme Court’s decision here.)
Kirtsaeng then requested more than $2 million in attorneys’ fees under Section 505 of the Copyright Act at the district court. The district court denied the motion, finding that Wiley’s claim was objectively reasonable and that no other factors in the analysis warranted an award of fees. The Second Circuit affirmed. In its second decision in the case, the Supreme Court vacated the lower court decisions, explaining that although the objective reasonableness factor should be given “substantial weight,” courts in the Second Circuit had given it more nearly “dispositive weight” on fee motions in copyright cases. (Read our summary of the Supreme Court’s decision here.)
On remand, the district court engaged in a new analysis of Kirtsaeng’s motion for attorneys’ fees, and denied the motion again. The district court explained that Wiley’s claim was objectively reasonable, describing Wiley’s position as “the legitimate attempt of a copyright holder to enforce its rights.” In line with the Supreme Court’s analysis, however, the district court noted this conclusion “is only the beginning of the relevant inquiry.”
The district court found that other factors weighed in Wiley’s favor as well. The court concluded that Wiley’s claim was not “frivolous” because it had “an arguable basis either in law or in fact.” The district court further found that Wiley had “acted in good faith to defend its distribution rights,” rejecting Kirtsaeng’s argument that Wiley “had an improper motive in attempting to use the Copyright Act to assert downstream control over the distribution of textbooks even after it profited from the first sale,” which was simply a restatement of the underlying merits. Finally, the court rejected Kirtsaeng’s argument that compensation was necessary to incentivize defendants with few resources “to stand up to corporate goliaths.” The district court acknowledged that “[i]n a closer case for an award of attorneys’ fees, this argument might have greater weight” but that it was insufficient to outweigh the other factors in this case.