Amicus Curiae Brief — Rimini Street, Inc., et al., Petitioners v. Oracle USA, Inc., et al.

Supreme Court briefDec 20, 2018

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No. 17-1625

IN THE

Supreme Court of the United States

___________

RIMINI STREET, INC., ET AL.,

Petitioners,

ORACLE USA, INC., ET AL.,

_________________

Respondents.

On Writ of Certiorari to the

United States Court of Appeals for the Ninth Circuit

_________________

BRIEF FOR THE NATIONAL MUSIC

PUBLISHERS’ ASSOCIATION AND

RECORDING INDUSTRY ASSOCIATION OF

AMERICA, AS AMICI CURIAE IN SUPPORT OF

RESPONDENTS

_________________

Jacqueline C. Charlesworth

COVINGTON & BURLING LLP

620 Eighth Avenue

New York, NY 10018

(202) 841-1000

jcharlesworth@cov.com

December 20, 2018

Beth S. Brinkmann

Counsel of Record

Rafael Reyneri

COVINGTON & BURLING LLP

850 Tenth Street, NW

Washington, DC 20001

(202) 662-6000

bbrinkmann@cov.com

Counsel for Amici Curiae

TABLE OF CONTENTS

TABLE OF AUTHORITIES...................................... iii

INTEREST OF AMICI CURIAE ................................1

SUMMARY OF ARGUMENT .....................................3

ARGUMENT ...............................................................6

The Cost of Enforcing Music Copyrights

Through Litigation Can Be Prohibitive. ............6

A. Litigation Costs Are a Barrier to

Enforcement of Music Copyrights. ..............6

B. Widespread Online Infringement Has

Significantly Exacerbated the

Adverse Impact of the High Costs of

II.

The Ability to Recover Full Costs Is

Necessary to Mitigate the Expense of

Protecting Music Copyrights. ...........................13

A. Awarding Full Costs Provides the

Proper Incentive Needed for

Plaintiffs to Tackle Large-Scale

Infringement. ..............................................14

B. Defendants and Claimants in

Smaller Copyright Cases Also Rely

on the Ability to Recover Full Costs. .........16

1. Defendants Need Full Cost

Recovery as a Deterrent to

Meritless Litigation ............................. 16

2. Absent the Ability to Recover Full

Costs, Music Litigants May Lose

More Than They Win. .......................... 18

CONCLUSION ..........................................................20

iii

TABLE OF AUTHORITIES

Page(s)

Cases

Berry v. Deutsche Bank Trust Co. Americas,

632 F. Supp. 2d 300 (S.D.N.Y. 2009) ................... 15

BMG Rights Mgmt. (US) LLC v. Cox

Commc’ns, Inc.,

149 F. Supp. 3d 634 (E.D. Va. 2015) ............. 12, 13

BMG Rights Mgmt. (US) LLC v. Cox

Commc’ns, Inc.,

234 F. Supp. 3d 760 (E.D. Va. 2017) ............. 12, 13

Capitol Records, Inc. v. MP3tunes, LLC,

No. 07-cv-9931, 2015 WL 13684546

(S.D.N.Y. Apr. 3, 2015) .................................... 5, 14

Capitol Records, Inc. v. MP3tunes, LLC,

No. 07-cv-9931, 2015 WL 7271565

(S.D.N.Y. Nov. 12, 2015) ............................ 6, 14, 15

Capitol Records, Inc. v. MP3tunes, LLC,

No. 07-cv-9931 (S.D.N.Y. Jan. 26, 2018) ............. 15

In re Charter Commc’ns, Inc., Subpoena Enf’t

Matter,

393 F.3d 771 (8th Cir. 2005) ................................ 10

Crawford Fitting Co. v. J. T. Gibbons, Inc.,

482 U.S. 437 (1987) ............................................ 4, 8

Gakm Resources LLC v. Jaylyn Sales Inc.,

No. 08-cv-6030, 2009 WL 2150891

(S.D.N.Y. July 20, 2009) ...................................... 15

Mayimba Music, Inc. v. Sony/ATV Latin

Music Publishing LLC,

No. 12-cv-1094 (S.D.N.Y. Mar. 31, 2016) ............ 18

Mayimba Music, Inc. v. Sony/ATV Latin

Music Publishing LLC,

No. 12-cv-1094 (S.D.N.Y. June 9, 2016) .............. 18

Nature’s Enters., Inc. v. Pearson,

No. 08-cv-8549, 2010 WL 447377 (S.D.N.Y.

Feb. 9, 2010) ......................................................... 15

Pringle v. Adams,

No. 10-cv-01656, 2014 WL 3706826 (C.D.

Cal. July 23, 2014) ............................................... 17

Recording Indus. Ass’n of Am., Inc. v. Verizon

Internet Servs., Inc.,

351 F.3d 1229 (D.C. Cir. 2003) ............................ 10

Skidmore v. Led Zeppelin,

No. 15-cv-03462, 2016 WL 6674985 (C.D.

Cal. Aug. 8, 2016) ................................................... 8

Tempest Publ’g, Inc. v. Hacienda Records &

Recording Studio, Inc.,

141 F. Supp. 3d 712 (S.D. Tex. 2015) .................. 19

Twentieth Century Fox Film Corp. v. Entm’t

Distrib.,

429 F.3d 869 (9th Cir. 2005) ................................ 17

U.S. Media Corp. v. Edde Entm’t, Inc.,

No. 94-cv-4849, 1999 WL 498216 (S.D.N.Y.

July 14, 1999) ....................................................... 15

Washingtonian Publ’g Co. v. Pearson,

306 U.S. 30 (1939) .............................................. 3, 7

Williams v. Bridgeport Music, Inc.,

No. 13-cv-06004, 2016 WL 6822309 (C.D.

Cal. Apr. 12, 2016) ................................................. 8

Statutes

17 U.S.C. § 504 ............................................................ 9

17 U.S.C. § 512 .......................................................... 11

17 U.S.C. § 505 ............................................................ 3

Act of Feb. 26, 1853, ch. 80, 10 Stat. 161 ............... 4, 8

1075 .................................................................... 4, 8

Stat. 2541 ........................................................... 4, 8

Other Authorities

Am. Intellectual Prop. Law Ass’n, Report of the

Economic Survey 2011 (2012) ................................ 7

Admin. Office of the U.S. Courts, Judicial

Business of the United States Courts: 2011

Annual Report of the Director (2012) .................... 7

Shyamkrishna Balganesh, Copyright

Infringement Markets, 113 Colum. L. Rev.

2277 (2013) ......................................................... 4, 7

U.S. Copyright Office, Copyright Small Claims

(Sept. 2013),

https://www.copyright.gov/docs/smallclaims

/usco-smallcopyrightclaims.pdf ............. 3, 9, 10, 19

INTEREST OF AMICI CURIAE 1

Amici curiae the National Music Publishers’ Association (“NMPA”) and the Recording Industry

Association of America (“RIAA”) are leading music

trade organizations representing the interests of music copyright owners, including music publishers,

record companies, and music creators. Amici’s members depend upon the rights conferred by the

their copyrights through litigation—to protect the

works they create, invest in, license, and distribute.

NMPA is the principal trade association representing the U.S. music publishing and songwriting

industry. Over the last 100 years, NMPA has served

as a leading voice representing American music publishers before Congress, in the courts, within the

music, entertainment, and technology industries, and

to the listening public. NMPA’s membership includes

major music publishers affiliated with record labels

and large entertainment companies as well as independently owned and operated music publishers of all

catalog and revenue sizes. Compositions owned or

controlled by NMPA’s hundreds of members account

for the vast majority of musical works licensed for

commercial use in the United States.

RIAA is a nonprofit trade organization representing the American recording industry. RIAA supports

1 No party or counsel for any party authored any part of this brief

or made a monetary contribution intended to fund the preparation or submission of this brief. All parties have provided blanket

consent to the filing of amicus briefs.

and promotes the creative and financial vitality of the

major recorded music companies. Its members are the

music labels that comprise the most vibrant record industry in the world.

RIAA members create,

manufacture, and/or distribute approximately 85 percent of all legitimate recorded music produced and

sold in the United States. In support of its members,

the RIAA works to protect the intellectual property

and First Amendment rights of artists and music labels, and monitors and reviews state and federal laws,

regulations, and policies.

The question presented in this case bears directly

on the ability of Amici and their members to protect

copyrighted musical works and sound recordings

against unauthorized use. The digital distribution of

music has changed the industry in myriad ways, including by vastly expanding the incidence and scale of

music piracy. A music copyright lawsuit may now involve thousands of copyrighted works and over a

million acts of infringement, and give rise to complicated technical questions that require expert

resources to address. As a result, in the experience of

Amici and their members, the cost of enforcing music

copyrights through litigation has risen dramatically.

The ability to recover not only attorneys’ fees but also

the actual costs of litigation, as provided under Section 505 of the Copyright Act, is therefore critical to

efforts to combat infringement.

Section 505 permits a prevailing copyright litigant

to recover the “full costs” of the action, including “a

reasonable attorney’s fee,” in the court’s discretion.

17 U.S.C. § 505. Seeking to overcome the plain meaning of this provision, petitioners assert that “full costs”

should be read to mean only those costs taxable under

the default rule of 28 U.S.C. § 1920. Such a narrow

and counterintuitive interpretation of Section 505

would seriously erode the efforts of Amici and their

members to protect the value of their copyrighted

works by seeking legal redress for infringement.

Music copyright owners rely on the ability to seek

recovery of the full range of litigation expenses as provided in the Copyright Act, especially in pursuing

large-scale or complex infringement actions. If petitioners’ constricted interpretation were to prevail, it

would eliminate courts’ discretion to award meaningful costs to prevailing plaintiffs and undermine the

practical ability to take action against music piracy.

Amici respectfully request that the Court affirm the

decision below and confirm that the Copyright Act

means what it says and allows trial courts the discretion to award full costs, not just those enumerated in

28 U.S.C. § 1920.

SUMMARY OF ARGUMENT

This Court observed nearly 80 years ago that a copyright is of no value to its owner if it cannot be

effectively enforced in the courts. Washingtonian

Publ’g Co. v. Pearson, 306 U.S. 30, 39-40 (1939). However, the cost of pursuing infringement litigation in

federal court is significant and at times prohibitive.

The Copyright Office has found that “[c]opyright owners whose works are infringed often are deterred from

enforcing their rights due to the burden and expense

of pursuing litigation in the federal system.” U.S.

(Sept. 2013), https://www.copyright.gov/docs/smallclaims/usco-smallcopyrightclaims.pdf. The cost of

over three times the already high average cost of litigation.”

Shyamkrishna Balganesh, Copyright

Infringement Markets, 113 Colum. L. Rev. 2277, 2285

(2013).

To mitigate these costs and ensure that copyright

owners are properly reimbursed and incentivized to

protect their creative works, Congress has repeatedly

reaffirmed the longstanding practice of shifting costs

in appropriate cases. For almost two centuries, the

to prevailing parties. See Copyright Act of 1831, ch.

16, § 12, 4 Stat. 436, 438-39; Copyright Act of 1909,

ch. 320, § 40, 35 Stat. 1075, 1084; Copyright Act of

1976, Pub. L. No. 94-553, 90 Stat. 2541, 2586. Significantly, the “full costs” provision of the Copyright Act

predates the enactment of the Fee Act of 1853, which

established the default federal rule for costs and that

is today embodied in 28 U.S.C. § 1920; Congress has

not seen the need to alter the more specific rule for

ch. 80, 10 Stat. 161, 161; Crawford Fitting Co. v. J. T.

Gibbons, Inc., 482 U.S. 437, 440 (1987).

The high cost of copyright litigation is a concrete

and serious issue for the music industry. Just as the

digital era has transformed the distribution of music,

it also has transformed music piracy. Litigation costs

for copyright actions, in particular those involving

online infringement, have increased dramatically. A

single case can involve over a million acts of infringement and implicate complicated technical questions

that require costly factual discovery and expert testimony. For example, in BMG Rights Management

(US) LLC v. Cox Communications, Inc., a jury found

an internet service provider liable for copyright infringement and awarded BMG $25 million in

statutory damages. BMG sought to recover its full

costs, amounting to nearly $3 million, the bulk of

which were expert fees. The district court denied

BMG’s request for these fees, opining that “nontaxable” costs could not be recovered. Such a result is

inconsistent with the clear discretion afforded trial

courts under the Copyright Act to award full costs to

a prevailing litigant.

In the face of escalating litigation costs, music industry litigants rely on the ability to recover their full

costs when appropriate. Without such a recovery, the

costs incurred to litigate an infringement case may be

grossly disproportionate to a party’s recovery of damages. Take, for instance, the case of Capitol Records,

Inc. v. MP3tunes, LLC, in which music company plaintiffs sued an online music service for online

infringement. No. 07-cv-9931, 2015 WL 13684546, at

*1 (S.D.N.Y. Apr. 3, 2015). After a lengthy trial, a jury

delivered a resounding win to the music companies,

awarding tens of millions in damages. Id. However,

to secure this victory, the prevailing plaintiffs were

forced to incur over $12 million in attorneys’ fees and

litigation expenses. Id. at *3. To mitigate their outlay, the music industry plaintiffs sought to recover

just over $4 million in attorneys’ fees and costs, including approximately $700,000 in “nontaxable” costs

for expert fees and other expenditures. See Capitol

Records, Inc. v. MP3tunes, LLC, No. 07-cv-9931, 2015

WL 7271565, at *1 (S.D.N.Y. Nov. 12, 2015). The

court largely refused to grant the “nontaxable” costs,

however.

These cases illustrate why the ability to seek full

costs—that is, the true costs of litigation—is necessary to preserve the proper balance of incentives in

the copyright system. Without the ability to recover

full costs, music industry plaintiffs will be left undercompensated and unable to pursue claims against the

most threatening infringers.

The ability to recover costs in defending against

baseless claims is also critical. Music publishers and

record labels at times are called upon to defend

against meritless copyright infringement litigation.

The ability to seek full costs not only serves to compensate parties who must respond to such frivolous

actions, but also to deter bad-faith actors who face the

risk of paying those costs as a losing party.

ARGUMENT

The Cost of Enforcing Music Copyrights

Through Litigation Can Be Prohibitive.

Litigation Costs Are a Barrier to Enforcement of Music Copyrights.

It is critically important for the owners of musical

works and sound recordings to be able to enforce their

copyrights by taking legal action when they have been

infringed. The value of musical works and sound recordings declines when the cost of copyright

enforcement rises. As this Court observed nearly 80

years ago, a copyright is of no value to its owner if it

cannot be effectively enforced in the courts. Washingtonian Publ’g Co. v. Pearson, 306 U.S. 30, 39-40

(1939).

The costs of pursuing infringement litigation, however, are significant and at times prohibitive. It has

been estimated that the average cost to a party of litigating a copyright case through trial ranges from

$350,000 to over $1.3 million. Am. Intellectual Prop.

Law Ass’n, Report of the Economic Survey 2011, at 35

(2012). One scholar recently concluded that the cost

of copyright litigation is “well over three times the already high average cost of litigation.” Shyamkrishna

Balganesh, Copyright Infringement Markets, 113

Colum. L. Rev. 2277, 2285 (2013). Moreover, as these

costs have increased in recent years, there has been a

marked decrease in the number of litigated copyright

cases—a 60 percent drop from 2005 to 2011. Id. at

2288-89 (citing Admin. Office of the U.S. Courts, Judicial Business of the United States Courts: 2011

Annual Report of the Director 130 (2012)).

Especially in a case of online infringement, many

of the most significant issues—for example, proof of

copying or distribution and the alleged infringer’s degree of knowledge—require fact-intensive analysis

that, in turn, depends upon extensive discovery and

expert testimony. At the same time, an infringement

action arising from alleged copying of a single individual work can require sophisticated testimony by

musicologists and market experts. 2

The long-established practice of cost-shifting in

system by ensuring that copyright owners are

properly reimbursed and incentivized to protect their

creative works. Almost two centuries ago, Congress

provided in the 1831 Copyright Act that the prevailing

party in a copyright suit may recover the “full costs”

of the action. See Copyright Act of 1831, ch. 16, § 12,

4 Stat. 436, 438-39. Congress expanded the provision

in 1909 to clarify that attorneys’ fees are to be included as part of “full costs,” Copyright Act of 1909,

ch. 320, § 40, 35 Stat. 1075, 1084, and has reaffirmed

this rule in subsequent iterations of the Copyright

Act, including in the current statute. See Copyright

Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541, 2586.

Significantly, the “full costs” provision of the Copyright Act predates the enactment of the Fee Act of

1853, which established the default federal rule for

costs and whose provisions are today embodied in 28

U.S.C. § 1920. See Act of Feb. 26, 1853 (“Fee Act”), ch.

80, 10 Stat. 161, 161; Crawford Fitting Co. v. J. T. Gibbons, Inc., 482 U.S. 437, 440 (1987). Congress has not

2 See, e.g., Memorandum of Points and Authorities in Support of

Motion for an Award of Attorneys’ Fees and Costs at 21-25, Williams v. Bridgeport Music, Inc., No. 13-cv-06004, 2016 WL

6822309 (C.D. Cal. Apr. 12, 2016), ECF No. 479-1 (discussing role

of musicologists and other experts in case involving infringement

of popular song); Defendant Warner/Chappell Music, Inc.’s Memorandum of Points and Authorities in Support of Motion for

Award of Additional Costs; Declaration at 6, 30-42, Skidmore v.

Led Zeppelin, No. 15-cv-03462, 2016 WL 6674985 (C.D. Cal. Aug.

8, 2016), ECF No. 295-1 (same).

seen the need to alter the more specific rule for copyright cases.

Permitting courts to award full costs comports

with Congress’ statutory framework. The amount of

statutory damages awarded in a music infringement

action is highly discretionary, ranging from a minimum of $200 to a maximum of $150,000 per work

infringed. See 17 U.S.C. § 504(c). Given the unpredictability of damages awards, the ability to recover

full costs mitigates the possibility of a ruling that

finds liability but does not award significant damages.

If courts are not permitted to award full costs, the

plaintiff risks incurring large litigation costs for uncertain damages. Even in cases that are resolved by

settlement before trial, the statutory right to seek full

costs may yield some amount of compensation for litigation expenses until the time of settlement

High litigation costs for copyright cases are not a

theoretical concern; they are a real barrier to the enforcement of music copyrights. The Copyright Office

explained in a 2013 report to Congress that “[c]opyright owners whose works are infringed often are

deterred from enforcing their rights due to the burden

and expense of pursuing litigation in the federal system.” U.S. Copyright Office, Copyright Small Claims,

(Sept.

2013),

https://www.copyright.gov/docs/smallclaims/usco-smallcopyrightclaims

.pdf; see also id. at 13 (stating litigation costs “may

well persuade a party to forego bringing a lawsuit or

cause a party to settle on less than ideal terms”). This

unfortunate reality should not be compounded by negating the statutory right of a copyright owner to be

compensated for the actual costs of litigating after

prevailing on an infringement claim.

Widespread Online Infringement

Has Significantly Exacerbated the

Adverse Impact of the High Costs of

The development of the internet has transformed

music distribution. It also has transformed music piracy, which can now be carried out with relative ease

on a massive scale. As a consequence, the litigation

costs associated with addressing music copyright infringement have increased dramatically.

Music

would otherwise be invested in the creation of new

music toward efforts to stem the tide of digital piracy.

implicates a host of complicated technical issues.

Something as mundane as determining the identity of

the infringer can require significant litigation resources. For example, a copyright owner may need to

file a “John Doe” action in federal court before it can

identify internet users associated with infringing activity conducted through an online service provider.

See, e.g., In re Charter Commc’ns, Inc., Subpoena Enf’t

Matter, 393 F.3d 771 (8th Cir. 2005) (music industry

plaintiffs could not obtain subpoenas to determine

identities of alleged online infringers without filing

action); Recording Indus. Ass’n of Am., Inc. v. Verizon

Internet Servs., Inc., 351 F.3d 1229 (D.C. Cir. 2003)

(same); see also U.S. Copyright Office, supra, at 18–19

(discussing the difficulty in identifying online infringers).

In addition, the scale of piracy litigation has grown

enormously, as noted above. A recent lawsuit involving infringement of sound recordings on a single

online service provider’s network included allegations

of more than one million acts of infringement. See

Plaintiffs’ Original Complaint at 2, ECF No. 1, UMG

Recordings, Inc. v. Grande Commc’ns Networks LLC,

No. 17-cv-365, (W.D. Tex. filed Apr. 21, 2017).

One of the largest drivers of costs in modern music

and sound recordings has become increasingly complex, it has necessitated the use of experts to

document and analyze the data necessary to demonstrate infringement or the failure to comply with other

requirements applicable to online providers under the

litigation costs that music industry litigants cannot

help but incur if they wish to protect the value of their

copyrighted works.

The recent case of BMG Rights Management (US)

LLC v. Cox Communications, Inc. well illustrates the

3 For instance, Section 512 of the Copyright Act, enacted in 1998

as part of the Digital Millennium Copyright Act, provides a safe

harbor from infringement liability for online service providers if

they comply with certain requirements set forth in the statute,

including removal of infringing material upon receipt of a copyright owner’s notice and adoption of a policy to track and

terminate repeat infringers. See generally 17 U.S.C. § 512.

costs involved in litigating a modern music infringement case. As is increasingly true of copyright

litigation, this action involved well over a thousand

copyrights, hundreds of thousands of infringers, and

millions of infringing acts. See BMG Rights Mgmt.

(US) LLC v. Cox Commc’ns, Inc., 149 F. Supp. 3d 634,

638, 640 (E.D. Va. 2015), aff’d in part, rev’d in part on

other grounds, 881 F.3d 293 (4th Cir. 2018). In order

to pursue its claims, BMG needed to conduct extensive

document and electronic discovery. Litigating the

case required the time-consuming task of piecing together incomplete, scattered records to demonstrate

that Cox repeatedly allowed egregious copyright infringers to remain online. Brief in Support of BMG’s

Motion for Attorneys’ Fees and Costs at 7, ECF No.

828, BMG, 234 F. Supp. 3d 760 (No. 14-cv-1611); see

also BMG Rights Mgmt. (US) LLC v. Cox Commc’ns,

Inc., 234 F. Supp. 3d 760, 767 (E.D. Va. 2017), vacated

on other grounds, 881 F.3d 293 (4th Cir. 2018). Moreover, BMG had to take or defend 36 depositions of 28

witnesses, including 11 expert witnesses, which

amounted to approximately 270 hours of deposition

testimony. Brief in Support of BMG’s Motion for Attorneys’ Fees and Costs at 27. BMG also had to

engage a team of experts to analyze and present evidence to the jury. One expert was required to provide

testimony on the high-tech software used by plaintiffs’

agent to search websites to identify files that appeared to contain plaintiffs’ musical works.

Declaration of Michael J. Allan in Support of Plaintiff

BMG’s Petition for Attorneys’ Fees and Expenses at

31, ECF No. 829, BMG, 234 F. Supp. 3d 760 (No. 14cv-1611). Another expert was required to confirm that

instances of infringement at particular IP addresses

related to the same Cox subscribers. Id. Still other

experts were needed to testify on the workings of Cox’s

automated system for processing (and rejecting) infringement notices, as well as Cox’s profits from the

infringement on its network. Id. at 30. Finally, another expert conducted a survey that established that

a substantial portion of Cox’s customers valued the

ability to use Cox’s network to infringe. Id. at 31.

Following trial, a jury found Cox liable for copyright infringement and awarded BMG $25 million in

statutory damages. BMG sought to recover its full

costs, which amounted to $2.92 million, the vast majority of which—over $2.44 million—were for expert

fees. Id. at 29, 31. Noting the circuit split on this issue, however, the district court denied BMG’s motion

for costs, opining that such costs could not be

awarded. 4 BMG, 234 F. Supp. 3d at 778-80. Such an

outcome is inconsistent with both the letter and spirit

of the Copyright Act, which clearly allows trial courts

the discretion to reimburse the prevailing party for expert fees and other “nontaxable” costs.

II.

The Ability to Recover Full Costs Is Necessary to Mitigate the Expense of Protecting

Music Copyrights.

The kinds of litigation costs discussed above have

4 The district court awarded $8,383,468 in attorneys’ fees and

$146,791 in taxable costs, finding that Cox’s defense in the case

“lacked a basis in fact and was therefore objectively unreasonable.” BMG Rights Mgmt. (US) LLC v. Cox Commc’ns, Inc., 234

F. Supp. 3d 760, 785 (E.D. Va. 2017), aff’d in part, rev’d in part

on other grounds, 881 F.3d 293 (4th Cir. 2018).

become increasingly common for music copyright owners seeking to protect their works against

infringement. Understandably, then, music industry

plaintiffs seek to recover their full costs in appropriate

cases. Without such a recovery, the costs incurred to

litigate an infringement case may be grossly disproportionate to a prevailing party’s recovery of damages.

Indeed, a prevailing party’s costs may actually exceed

the amount of its recovery.

Awarding Full Costs Provides the

Proper Incentive Needed for Plaintiffs

Tackle

Large-Scale

Infringement.

Without recovery of full costs, music publishers

and record companies can face disincentives when

considering the prospect of expensive litigation to

shut down an infringer. Take, for instance, the case

of Capitol Records, Inc. v. MP3tunes, LLC, in which

music company plaintiffs sued an online music service

for massive online infringement. No. 07-cv-9931,

2015 WL 13684546, at *1 (S.D.N.Y. Apr. 3, 2015). After a lengthy trial, a jury delivered a resounding win

to the music companies, awarding some $48 million in

damages, which the court reduced to $23 million. Id.

at *1. In order to secure this judgment, plaintiffs incurred “in excess of $12 million in attorneys’ fees and

costs.” Id. at *3.

The music industry plaintiffs sought to recover a

little over $4 million in attorneys’ fees and costs,

which included approximately $700,000 in “nontaxable” costs. See Capitol Records, Inc. v. MP3tunes,

LLC, No. 07-9931, 2015 WL 7271565, at *1 (S.D.N.Y.

Nov. 12, 2015). These “nontaxable” costs related to

electronic discovery, trial support, travel, electronic

research, rebuttal expert fees, and consulting fees. Id.

at *6. The court awarded only a fraction of these “nontaxable” costs, denying reimbursement for the

rebuttal experts and other professional services. Id.

In so doing, the court observed that other courts in the

district had held that the only costs recoverable were

those enumerated in 17 U.S.C. § 1920. Id. (citing Nature’s Enters., Inc. v. Pearson, No. 08-cv-8549, 2010

WL 447377, at *10 (S.D.N.Y. Feb. 9, 2010) and U.S.

Media Corp. v. Edde Entm’t, Inc., No. 94-cv-4849,

1999 WL 498216, at *7 (S.D.N.Y. July 14, 1999)). Perhaps concerned with an overly harsh result, however,

despite denying professional fees, the court did allow

“‘reasonable out-of-pocket’ expenses incurred during

litigation as part of their attorneys’ fee award.” Id.

(quoting Berry v. Deutsche Bank Trust Co. Americas,

632 F. Supp. 2d 300, 306 (S.D.N.Y. 2009)). 5

Given the ongoing threat of online music piracy,

there is a continuing need for music copyright owners

5 The court awarded costs for the “types of routine costs awarded

to previous parties in trademark and copyright infringement actions.” Id. (quoting Gakm Resources LLC v. Jaylyn Sales Inc.,

No. 08-cv-6030, 2009 WL 2150891, at *10 (S.D.N.Y. July 20,

2009) (internal quotation marks omitted)). The allowed costs,

totaling roughly $250,000, were to reimburse for electronic discovery, photocopying and printing, legal database research, and

travel. Id. After the court made this award, the parties entered

into a global settlement of all issues, including costs and fees.

See Stipulation and Order Adjourning Action and Approving

Conditional Final Consent Judgment, ECF No. 760, Capitol Records, Inc. v. MP3tunes, LLC, No. 07-cv-9931 (S.D.N.Y. Jan. 26,

2018).

to take legal action to protect the value of their musical works and sound recordings and the livelihoods of

those who create them. 6 The practical ability to pursue challenging litigation is essential not only to stop

piracy and compensate copyright owners and creators

for unauthorized uses, but to protect and foster the legitimate online marketplace. Given the need to

gather and analyze vast amounts of data in complex

the true costs of litigation—is necessary to preserve

the proper balance of incentives in the copyright system. Otherwise, music industry plaintiffs will be left

undercompensated and hamstrung in their ability to

pursue claims against the most threatening infringers.

Defendants and Claimants in

Smaller Copyright Cases Also Rely

on the Ability to Recover Full Costs.

Defendants Need Full Cost Recovery as a Deterrent to

Meritless Litigation

Music publishers and record labels are also at

times called upon to defend against meritless copyright infringement litigation. The ability to recover

6 Examples of such ongoing litigation efforts include UMG Re-

cordings, Inc. v. Grande Communications, No. 17-cv-365

(W.D. Tex. filed Apr. 21, 2017), Sony Music Entertainment v. Cox

Communications, Inc., No. 18-00950 (E.D. Va. filed July 31,

2018), Atlantic Recording Corporation v. Spinrilla, LLC, No. 17cv-431 (N.D. Ga. filed Feb. 3, 2017), and UMG Recordings, Inc. v.

Kurbanov, No. 18-cv-957 (E.D. Va. filed Aug. 3, 2018).

costs in defending against baseless claims not only

serves to compensate responding parties for frivolous

actions, but also to deter bad-faith actors who must

face the risk of having to pay those costs as a losing

party.

Pringle v. Adams illustrates why the Ninth Circuit’s statutory interpretation correctly allows

awarding of full costs. No. 10-cv-01656, 2014 WL

3706826 (C.D. Cal. July 23, 2014). In Pringle, several

music industry defendants were sued for supposed infringement of a song. Id. at *1. After winning on

summary judgment, the defendants sought full costs,

including approximately $300,000 of “nontaxable”

costs for expert witness fees, online legal research

charges, deposition costs, and court expenses. Id.

at *7; Defendants’ Supplemental Brief in Further

Support of Motion for an Award of Attorneys’ Fees and

Full Costs at 15, ECF No. 304, Pringle, 2014 WL

3706826 (No. 8:10-cv-1656). In its order granting attorneys’ fees and costs, the court referenced that the

Ninth Circuit had affirmed summary judgment on appeal in part because plaintiff’s evidence “raise[d] only

the barest possibility” that defendants had access to

plaintiff’s song. Pringle, 2014 WL 3706826, at *2. Relying on Ninth Circuit precedent, the court

compensated the prevailing defendants for the unwarranted cost of defending against meritless claims.

Pringle, 2014 WL 3706826, at *7-8 (citing Twentieth

Century Fox Film Corp. v. Entm’t Distrib., 429 F.3d

869, 885 (9th Cir. 2005)).

Similarly, a New York court awarded costs to the

defendants in Mayimba Music, Inc. v. Sony/ATV

Latin Music Publishing LLC, which involved the

rightful ownership of a song popularized by Shakira.

Order Denying Plaintiff’s Motion to Vacate Judgment,

and Granting Defendants’ Motion for Sanctions at 1,

ECF No. 256, Mayimba Music, Inc. v. Sony/ATV

Latin Music Publishing LLC, No. 12-cv-1094

(S.D.N.Y. Mar. 31, 2016). After concluding that the

plaintiff lacked a valid copyright because it had fabricated the date on which it had authored its work, the

court, exercising its discretion in light of defendant’s

bad faith, awarded $50,000 of “nontaxable” costs in

addition to attorneys’ fees accrued from the date of a

crucial motion in the case. Id. at 1-3; Order Approving

Application for Attorney’s Fees at 1-2, ECF No. 268,

Mayimba Music, Inc. v. Sony/ATV Latin Music Publishing LLC, No. 12-cv-1094 (S.D.N.Y. June 9, 2016).

The cost awards in such cases help to ensure that

defendants are not cowed into settling meritless

claims simply because of the expense required to vindicate their copyrights. At the same time, they reduce

the incentives for disingenuous actors to bring frivolous litigation.

Absent the Ability to Recover

Full Costs, Music Litigants May

Lose More Than They Win.

A rule precluding courts from awarding full costs

would also be detrimental to copyright owners seeking

to bring modest-sized infringement claims, particularly in light of the lower damages awarded in such

cases.

Claimants with smaller infringement claims face

formidable challenges in enforcing their copyrights.

U.S. Copyright Office, supra, at 3. “Especially in the

case of lower-value copyright claims, the potential for

monetary recovery can be quickly overcome by the

costs of discovery, motion practice, and other litigation expenses.” Id. at 24. Indeed, litigation costs are

generally disproportionately large in cases with modest-sized claims. Id. at 24-25. These problems are

compounded when courts do not fully compensate prevailing parties for their costs in bringing the case. By

excluding costs related to discovery or experts, courts

deter copyright owners from asserting meritorious

claims, as the costs of litigating can outweigh the recovery.

In Tempest Publishing, Inc. v. Hacienda Records &

Recording Studio, Inc., for example, the court

awarded $5,000 in damages for infringement of the

plaintiff’s song. 141 F. Supp. 3d 712, 717 (S.D. Tex.

2015). The prevailing party’s litigation costs were

more than three times that amount, however, and the

court denied recovery of the plaintiff’s “nontaxable”

costs, which amounted to over $4,000. Id. at 724-26;

Plaintiff’s Bill of Costs at 2-3, ECF No. 131, Tempest,

141 F. Supp. 3d 712 (No. 4:12-cv-736). In the end, the

prevailing party achieved a largely Pyrrhic victory.

The inability to recover full costs in such a case, notwithstanding the express language of the Copyright

Act, renders enforcement of one’s copyright a losing

proposition.

CONCLUSION

For the foregoing reasons, the Ninth Circuit’s judgment should be affirmed.

Respectfully submitted.

Jacqueline C. Charlesworth

COVINGTON & BURLING LLP

620 Eighth Avenue

New York, NY 10018

(202) 841-1000

jcharlesworth@cov.com

Beth S. Brinkmann

Counsel of Record

Rafael Reyneri

COVINGTON & BURLING LLP

850 Tenth Street, NW

Washington, DC 20001

bbrinkmann@cov.com

(202) 662-6000

December 20, 2018

Counsel for Amici Curiae

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.