Amicus Curiae Brief — Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 890 (2016) (No. 15-375)

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MAR 30 2016

|_ OFFICE OF THECLER

No. 15-375

In the Supreme Court of the United States

SUPAP KIRTSAENG, DBA BLUECHRISTINEQ9, PETITIONER

JOHN WILEY & SONS, INC.

ON WRIT OF CERTIORARI

TO THE UNITED STATES CC /RT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING RESPONDENT

DONALD B. VERRILLI, JR.

Solicitor General

Counsel of Record

BENJAMIN C. MIZER

Principal Deputy Assistant

Attorney General

MALCOLM L. STEWART

Deputy Solicitor General

ELAINE J. GOLDENBERG

Assistant to the Solicitor

General

MARK R. FREEMAN

SONIA K. MCNEIL

Attorneys

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdo)j.gov

(202) 514-2217

QUESTION PRESENTED

Whether the district court abused its discretion under

17 U.S.C. 505, which permits an award of attorney’s

fees to a prevailing party in a civil action under the

in its analysis to the objective reasonableness of the

losing party’s position.

(I)

TABLE OF CONTENTS

Page

Interest of the United States. ...............scccssossscsscsossscocsssesseseees l

IR coat 7 sasisienslinmiintnipensnaianseousesenempensite 1

Summary of argument.............ccesceceseessseeseeenseeensereneenanesensenees 9

Argument:

A. The Second Circuit’s interpretation of Section 505

Be iB ceceececsenceceessersuenccenesssnsencepnsasenesesseosssnssonsssvosscses 12

B. Petitioner’s interpretation of Section 505 should

Wee FENCCOR ....0ccrecrecccceecocserceseccssccesenevosnconocnssenesnsesssessosee 28

C. The judgment of the court of appeals should be

IIT ccs sseciiensncesinettnncieestenitshietindamsiainionemednisaminnenannenn 33

Cre |.’ sna iiaaeananitinameniunndeninsgtededninintesmmertnsenetes 34

TABLE OF AUTHORITIES

Cases:

Ahng v. Allsteel, Inc., 96 F.3d 1033 (7th Cir. 1996)............ 20

Albemarle Paper Co. v. Moody, 422 U.S. 405 (1975)......... 22

Alyeska Pipline Serv. Co. v. Wilderness Soc’y,

PR eee 12

American Council of Certified Podiatric Physicians

& Surgeons v. American Bd. of Podiatric Surgery,

Inc., 185 F.3d 606 (6th Cir. 1999) ...........cccccceseeeseeeeeeeeenneees

Arista Records, LLC v. Launch Media, Inc.,

344 Fed. Appx. 648 (2d Cir. 2009) ...........:cccsceseneeneeeneneesenes

Bauer v. Yellen, 375 Fed. Appx. 154 (2d Cir. 2010) ...........

Browne v. Greensleeves Records, Ltd., No. 03 Civ.

7696, 2005 WL 2716568 (S.D.N.Y. Oct. 21, 20085) ............

Bryant v. Media Right Prods., Inc., 603 F.3d 135

(2d Cir.), cert. denied, 562 U.S. 1064 (2010)............... 15,

Community for Creative Non-Violence v. Reid,

a, Fee cnccecsastncnensecintimascennninnsionvimniniiiesin 16,

(IIT)

Cases—Continued: Page

Costco Wholesale Corp. v. Omega, S.A., 562 U.S. 40

ST accseshshenitianiaditaciabaiiaaadnsiincaieciiaubinnsdiagsinsidiindbiedsnianaienibinsopieimiesieen 6

Effie Film, LLC v. Murphy, No. 14-3367-cv,

2015 WL 6079993 (2d Cir. Oct. 16, 2015)... ccccceeseeees 24

Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994) ........... passim

Hensley v. Eckerhart, 461 U.S. 424 (1983)..............ccccccece0 33

Independent Fed’n of Flight Attendants v. Zipes,

I eT CIEE Ceressietonnserisamnilennsinnaeiannnecdatiiantan 12, 13, 22, 33

Lava Records, LLC v. Amurao, 354 Fed. Appx. 461

ER ee ae 23

Lieb v. Topstone Indus., Inc., 788 F.2d 151

STEIN, TIT cnecdiiniesiieesintnbeieesamiptttapapenntiisapatepbibdeninmectinecmpseenses 4

Loew's Inc. v. Columbia Broad. Sys., Inc.,

131 F Supp. 165 (S.D. Cal. 1955), aff'd, 239 F.2d

532 (9th Cir. 1956), aff'd 356 U.S. 43 (1958) ......0... cece. 17

Lorillard v. Pons, 434 U.S. 575 (1978) .......cssccsrsesseerereeees 18

Mallery v. NBC Universal, Inc., 331 Fed. Appx. 821

(2d Cir. 2009), cert. denied, 559 U.S. 1101 (2010)............ 15

Martin v. Franklin Capital Corp., 546 U.S. 132

SITET Ackouniicindevascisisensontgdutitinemanmaieemmpmanisintucneiion 19, 20, 21, 22

Matthew Bender & Co. v. West Publ’g Co., 240 F.3d

icirienetisiteieiestnntninidccititenianianicinminnes 6, 8, 15

Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc.,

tg eevee 23

Merrill Lynch, Pierce, Fenner & Smith, Inc. v.

Curran, 456 U.S. 358 (19GB) .......ccccccccccccccccescssssssscesessesseees 18

Mills Music, Inc. v. Snyder, 469 U.S. 153 (1985)......... 16, 18

Mitek Holdings, Inc. v. Arce Eng’g Co., 198 F.3d 840

I TE iccsitecnsctincissekéasiieniachesbiinppeonansignantnnniideninenianeninias 6

Norbay Music, Inc. v. Kings Record, Inc, 249

FR, Bae aS: Bn I rererennennsceoensssnensncenenessnsrncnnesens 18

Cases—Continued: Page

Octane Fitness, LLC v. ICON Health & Fitness,

Fea g TI CR FI a ciesecntermintecencvissninians 13, 19, 24, 25

Official Aviation Guide Co. v. American Aviation

Assocs., 162 F.2d 541 (7th Cir. 1947) .0.0........cccccceseceeseeeeee 17

Russian Entm't Wholesale, Inc. v. Close-Up Int'l,

Inc., 482 Fed. Appx. 602 (2d Cir. 2012) ..............cccccceccees 23

Tax Analysts v. United States Dep't of Justice,

Be SU Geis Ge Boe icatiinecseseresinninsspecssvensiscnetisinecs 20

Viva Video, Inc. v. Cabrera, 9 Fed. Appx. 77 (2d Cir.

Ue suidatadisichhacisientcsiaileadiduaphinetibchsaphiductabrisiraibagasiihinlediidea sitesi 16, 23

Zalewski v. Cicero Builder Dev., Inc., 754 F.3d 95

i acta laaet anh didcla detiadeseidatiabingdibdasiniibion 24

Constitution and statutes:

ep sn suuiicsnsmnmantanta 2

Act of July 30, 1947, ch. 391, § 116, 61 Stat. 665 ............. 3, 16

I re Sr Te I Diccreiennrcesintinncsiencnccansinesioctsisantanesucnion l

er ee I BI iicrcsncesntssesemiceneniinitesaniianiinainiahéines 3

p PEED Fee ORS SoC RE rae Ney eer ee a EY 3, 5, 16

gc | ERS EREERS OMEN eanr sernneenrvte nee eae mers 2

ESR SRE SRE SN errr Ons MRO REE 2

Be CID da scckicct:-snsiccethicdasnbinicebitisttcaddvaiatininabeadesniassiil 5

| st |e SIE Saco ne secre leer 2,5

BN III ines <ccncninsdncincdiacupntmiastiinadbioasgenentn 18

| C'S SEU RER Sv UR eater ree ree OnEATS 2

| REE e ae ey eco 2

SERRE RI RRS Er Ae SR a 2

Fe a UT ioc ctncistceitdnnincsanitaintaninmanoitiosemneasaueneaisiiaeetios 2

Statutes—Continued: Page

a nat cieticectanisshanniendaniniepiininidabnantdataeeseniiaien passim

Be I E ciaishctesiitenindecipetoneeniehenticnaninnieanatetaesiaaiatiets 5

I i tcc hiisinaiec cca cealiticetacendadadsennianiinimetaiiiel 1

Lanham Act, 15 U.S.C. 1051 ef 86. ............0.-c.cscceceesseceerenes 24

15 U.S.C. 1117(a) (1994 & Supp. V 1999) ..............0..0.... 20

I a re es © Oe I cecccnstetstrcerstrennimnsenenmmnenns 24

ss semenilastiasanidineicaasaaianiinnics 1

Se ios isinses citiaisasiiddaaieesidihpiamipaiaiaeioiiamianeatats 1

I a eeivainneslidbanauneall 19

ee a I ni ocsneescnninnasennsensectennaniiatenssenieslem 20

BN II nor sscedecncanrisscdceheebclbecninnenheeinmeansdactid 19, 20, 21

Ns SR icnidisccsienestinibinteisinniinctieneaenasniatiendenticisenieaies 20

Miscellaneous:

Jeffrey Edward Barnes, Comment, Attorney's Fee

Awards in Federal Copyright Litigation After

Fogerty v. Fantasy: Defendants Are Winning

Fees More Often, but the New Standard Still Fa-

vors Prevailing Plaintiffs, 47 UCLA L. Rev. 1381

Ralph S. Brown, Jr., Study No. 23, The Operation of

the Damage Provisions of the Copyright Law: An

Exploratory Study, reprinted in Staff of the Sub-

comm. on Patients, Trademarks, and Copyrights,

House Comm. on the Judiciary, 86th Cong., 2d

PR lies alacant tiniatintntetneiaiation 17, 19

1 Mary Frances Derfner & Arthur D. Wolf,

Court Awarded Attorney Fees (2015)...............--.-0---++00-+ 20

6 William F Patry, Patry on Copyright (2015).................- 27

Vil

Miscellaneous—Continued: Page

Report of the Register of Copyrights on the General

Revision of the U.S. Copyright Law (Comm. Print

SITE cinioiikbiseriesssiateietsmmnnenslaatattsdendesthniatiindasdiatsidciddetidatiabinlibtaianebiin’ 17

Thomas D. Rowe, Jr., The Legal Theory of Attorney

Fee Shifting: A Critical Overview, 1982 Duke L..J.

John Tehranian, Curbing Copyblight, 14 Vand. J.

Bs Ae PE: ind TI tt icrntninsntapcncnssnossncinctcnicanspuinintnonncninions 26

In the Supreme Court of the United States

No. 15-375

SUPAP KIRTSAENG, DBA BLUECHRISTINEY9, PETITIONER

JOHN WILEY & SONS, INC.

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE SUPPORTING RESPONDENT

INTEREST OF THE UNITED STATES

This case involves the interpretation of 17 U.S.C.

505, which authorizes district courts to award attor-

ney’s fees in suits under the Copyright Act of 1976, 17

U.S.C. 101 et seg. (Copyright Act). Several federal

agencies have an interest in the practical operation of

the copyright system and in the proper interpretation

of the copyright laws. See, e.g., 17 U.S.C. 701 (Copy-

right Office); 35 U.S.C. 2(b)(8) and (¢)(5) (Patent and

Trademark Office). The United States therefore has a

substantial interest in the Court’s disposition of this

case.

STATEMENT

The question presented in this case concerns the

criteria that a district court should consider in decid-

ing whether to award attorney’s fees to a prevailing

party in a civil action under the Copyright Act. The

(1)

district court denied the fee request at issue here, and

the court of appeals affirmed. In determining wheth-

er fees should be awarded, botii courts applied an

approach that gives substantial weight to the reasona-

bleness of the losing party’s arguments on the merits,

while also mandating consideration of all relevant

circumstances and recognizing that an award of fees

may be proper even if the losing party’s position was

reasonable. See Pet. App. 4a-5a, 13a-14a.

1. a. The Copyright Act grants copyright protec-

tion to “original works of authorship fixed in any tan-

gible medium of expression.” 17 U.S.C. 102(a); see

U.S. Const. Art. I, § 8, Cl. 8 (“Congress shall have

Power” to “promote the Progress of Science * * * by

securing [to Authors] for limited Times * * * the

exclusive Right to their * * * Writings”). Copyright

protection confers on the author of an original work

certain exclusive statutory rights, including the rights

to copy, distribute, and display the work. 17 U.S.C.

106; see 17 U.S.C. 109(a).

The “owner of an exclusive right under a copy-

right” that has been registered with the Copyright

Office “is entitled * * * to institute an action for any

infringement of that particular right committed while

he or she is the owner of it.” 17 U.S.C. 501(b); see 17

U.S.C. 411. A prevailing plaintiff in such a suit “is

entitled to recover * * * actual damages” or statuto-

ry damages and may also seek injunctive remedies. 17

U.S.C. 504; see 17 U.S.C. 502-503.

For more than 100 years, U.S. law has authorized

trial courts to award costs and attorney’s fees to the

prevailing party in a copyright suit. The Copyright

Act of 1909 provided that “in all actions, suits, or pro-

ceedings under this Act, except when brought by or

against the United States or any officer thereof, full

costs shall be allowed, and the court may award to the

prevailing party a reasonable attorney’s fee as part of

the costs.” Ch. 320, § 40, 35 Stat. 1084. That provision

was carried forward in 1947, when the Copyright Act

was codified in Title 17 of the U.S. Code. See Act of

July 30, 1947 (1947 Act), ch. 391, § 116, 61 Stat. 665.

In 1976, when enacting a substantial revision of

rather than mandatory but left essentially unchanged

the existing language authorizing attorney’s-fee

awards. See Copyright Act, Pub. L. No. 94-553, Tit. I,

§ 505, 90 Stat. 2586; see also Fogerty v. Fantasy, Inc.,

510 U.S. 517, 523 (1994). That provision, which has

not subsequently been amended, states that in a copy-

right action, “the [district] court in its discretion may

allow the recovery of full costs by or against any party

other than the United States or an officer thereof.” 17

U.S.C. 505. It further states that, “[e]xcept as other-

wise provided by this title, the court may also award a

reasonable attorney’s fee to the prevailing party as

part of the costs.” /bid.

b. In Fogerty, this Court considered “what stand-

ards should inform a court’s decision to award attor-

ney’s fees” under Section 505 “to a prevailing defend-

ant in a copyright infringement action.” 510 U.S. at

519. The underlying infringement suit in Fogerty had

culminated in a jury verdict for the defendant, who

then sought to recoup the fees that he had incurred.

Id. at 520. The Court held that, unlike the fee-shifting

provisions of the Civil Rights Act of 1964 and some

other federal statutes, Section 505 is not intended to

treat prevailing plaintiffs more favorably than prevail-

ing defendants. /d. at 524-527, 533. The Court ex-

plained that “it is peculiarly important that the

boundaries of copyright law be demarcated as clearly

as possible,” and that “defendants who seek to ad-

vance a variety of meritorious copyright defenses

should be encouraged to litigate them to the same

extent that plaintiffs are encouraged to litigate meri-

torious claims of infringement.” /d. at 527.

The Court also rejected the contention that Section

505 was intended to adopt the “British Rule,” under

which “both prevailing plaintiffs and defendants

should be awarded attorney’s fees as a matter of

course.” 510 U.S. at 533. Because Congress “legis-

lates against the strong background of the American

Rule,” under which “parties are to bear their own

attorney’s fees” absent contrary legislative direction,

the Court believed that such “a bold departure from

traditional practice would have surely drawn more

explicit statutory language and legislative comment.”

Id. at 533-534.

The Court concluded that, under Section 505,

“{plrevailing plaintiffs and prevailing defendants are

to be treated alike, but attorney’s fees are to be

awarded to prevailing parties only as a matter of the

court’s discretion.” 510 U.S. at 534; see ibid. (“There

is no precise rule or formula for making these deter-

minations.”) (citation omitted). In a footnote, the

Court stated that “courts following the evenhanded

standard have suggested several nonexclusive factors

to guide courts’ discretion,” including “frivolousness,

motivation, objective unreasonableness (both in the

factual and in the legal components of the case) and

the need in particular circumstances to advance con-

siderations of compensation and deterrence.” /d. at

534 n.19 (quoting Lieb v. Topstone Indus., Inc., 788

F.2d 151, 156 (3d Cir. 1986)). The Court “agree[d)

that such factors may be used to guide courts’ discre-

tion, so long as such factors are faithful to the purpos-

es of the Copyright Act and are applied to prevailing

plaintiffs and defendants in an evenhanded manner.”

Ibid.

2. a. Respondent publishes academic textbooks for

sale in domestic and international markets. Pet. App.

32a-34a. Petitioner arranged for his friends and fami-

ly in Thailand to purchase editions of respondent’s

textbooks that were manufactured abroad. /d. at 34a.

He then imported the purchased copies into the

United States and resold them in this country for a

profit. Jbid.

Respondent sued in the Southern District of New

York, alleging that petitioner had infringed respond-

ent’s copyrights by importing textbooks made and

purchased abroad without respondent’s authorization.

See 17 U.S.C. 106(3) (copyright owner’s exclusive

right “to distribute copies” of a copyrighted work); 17

U.S.C. 602(a)(1) (defining as infringement of the right

granted by Section 106(3) the unauthorized importa-

tion into the United States “of copies * * * of a work

that have been acquired outside the United States”).

In response, petitioner asserted the first sale defense,

under which “the owner of a particular copy or

phonorecord lawfully made under this title, or any

person authorized by such owner, is entitled, without

the authority of the copyright owner, to sell or other-

wise dispose of the possession of that copy or

phonorecord.” 17 U.S.C. 109%a). The district court

held that the defense was unavailable because foreign-

manufactured goods are not “lawfully made under”

Title 17, and the jury found petitioner liable for

$600,000 in statutory damages. Pet. App. 35a. The

court of appeals affirmed. /d. at 35a-36a.

This Court reversed. Pet. App. 29a-113a. Resolv-

ing an issue on which the Court had previously split 4-

4, see Costco Wholesale Corp. v. Omega, S.A., 562 U.S.

40 (2010) (per curiam), the Court held that “the ‘first

sale’ doctrine applies to copies of a copyrighted work

lawfully made abroad.” Pet. App. 32a. Justice Gins-

burg, joined by Justice Kennedy and (in large part) by

Justice Scalia, dissented. /d. at 74a.

b. After the Second Circuit entered judgment on

remand, Pet. App. 25a-28a, petitioner requested an

award of fees under 17 U.S.C. 505 for all phases of the

litigation, see Pet. App. 16a n.14 (noting that petition-

er sought more than $2 million in fees). The district

court denied petitioner’s request. /d. at 6a-24a.

Relying on Fogerty, the district court stated that

“(t]he touchstone” of the Section 505 inquiry is wheth-

er an award of fees “will further the interests of the

boundaries of copyright law” to “maximize the public

exposure to valuable works.” Pet. App. 9a-10a (quot-

ing Fogerty, 510 U.S. at 527, and Mitek Holdings, Inc.

v. Arce Eng’g Co., 198 F.3d 840, 842-843 (11th Cir.

1999)). The court explained that, in the wake of Fo-

gerty, the Second Circuit had “emphasized in particu-

lar the importance of the objective unreasonableness”

of the losing party’s position “in guiding the court’s

discretion as to whether to award attorney’s fees.” /d.

at 10a (citing Matthew Bender & Co. v. West Publ’g

Co., 240 F.3d 116 (2d Cir. 2001)); see id. at 10a n.9

(collecting cases). The district court also observed

that, under Second Circuit precedent, “other factors

may, in some circumstances, outweigh the objective

unreasonableness factor and lead the court to con-

clude that equity supports a fee award.” /d. at 13a.

The district court concluded that respondent’s in-

fringement claim “was not unreasonable” and that “no

other equitable consideration weigh{ed] in favor” of a

fee award. Pet. App. 8a. Addressing the considera-

tions noted by this Court in Fogerty, the district court

explained that respondent’s claim “was clearly not

frivolous”; that respondent’s “motivation was not

inappropriate”; that respondent “did not engage in

any conduct that equity suggests should be deterred

in the future”; and that, “[w]ith regard to compensa-

tion, the evidence shows that [petitioner] has not in

fact paid, and is not obligated to pay, most of the legal

fees sought” and “may now continue his arbitrage

business free of the fear of incurring copyright liabil-

ity.” Id. at 14a-17a.

The district court also analyzed additional consid-

erations advanced by petitioner in support of his claim

for fees. Pet. App. 17a. The court explained that,

although this Court’s decision in the case had “clari-

fied the boundaries of copyright law,” that result was

“due as much to [respondent’s] risk in bringing the

claim as to [petitioner’s] successful defense against

it.” Id. at 18a. The court stated that “the degree of

success” that petitioner had obtained did not “over-

ride” the objective reasonableness of respondent’s

claim. /d. at 20a, 22a. The court also concluded that

any “financial disparity” between the parties “does

not speak to whether a fee award * * * would fur-

ther the goals of the Copyright Act,” since “it is im-

portant to encourage reasonable claims (regardless of

a plaintiff’s wealth or poverty) as well as meritorious

defenses involving close or novel issues of copyright

law.” Id. at 23a-24a.

ce. The court of appeals affirmed the district court’s

judgment in a brief summary order. Pet. App. la-5a.

Emphasizing that the standard of review was “highly

deferential,” the court stated that “[t]he district court

is not bound by any ‘precise rule or formula’” and

should exercise its discretion “in light of the [relevant]

considerations,” including those noted by this Court in

Fogerty. Id. at 3a (citation omitted; second set of

brackets in original). The court of appeals concluded

that the district court’s “thorough opinion * * *

properly placed ‘substantial weight’ on the reasona-

bleness of {respondent’s] position in this case,” since

imposing fees against a litigant with an “objectively

reasonable” position “will generally not promote the

purposes of the Copyright Act.” /d. at 4a (quoting

Matthew Bender, 240 F.3d at 122).

The court of appeals disagreed with petitioner’s

contention that the district court had “‘fixated’ on

{respondent’s] objective reasonableness at the ex-

pense of other relevant factors.” Pet. App. 4a (citation

omitted). The court of appeals noted the district

court’s acknowledgment that “other factors may

outweigh the objective unreasonableness factor,” ibid.

(citation omitted), and found no abuse of discretion in

the district court’s “overall conclusion” that those

other factors did not justify a fee award “in the cir-

cumstances of this case,” id. at 5a & n.2.'

' The court of appeals “respectfully question|ed)” one aspect of

the district court’s analysis: “the conclusion that considerations of

compensation did not favor a fee award because [petitioner] was

represented pro bono at the Supreme Court.” Pet. App. 5a n.2. In

the court of appeals’ view, putting weight on that fact could “de-

SUMMARY OF ARGUMENT

A. The Second Circuit’s approach to fee-shifting

under 17 U.S.C. 505, which treats the objective rea-

sonableness of the losing party’s merits position as a

particularly significant factor but mandates considera-

tion of all other relevant circumstances as well, re-

flects a proper understanding of Section 505.

1. Section 505 authorizes district courts to award

attorney’s fees in copyright cases but does not specify

the fee-shifting criteria that courts should apply. In

Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994), this

Court held that Section 505 must be applied in a man-

ner that is neutral as between plaintiffs and defend-

ants, and it identified certain non-exclusive factors

that courts can consider.

2. The Second Circuit’s approach to Section 505 is

consistent with the Copyright Act’s purposes as de-

scribed in Fogerty, with longstanding copyright prac-

tice, and with the standards that generally apply un-

der other discretionary federal fee-shifting provisions.

By emphasizing the objective reasonableness of the

losing party’s arguments, that approach deters unrea-

sonable arguments and encourages reasonable ones.

Because plaintiffs and defendants are equally capable

of making both reasonable and unreasonable argu-

ments, the Second Circuit’s approach reflects the

even-handedness that Fogerty demands.

Beginning in 1909, federal law stated that the dis-

trict court in a copyright suit “may award” attorney’s

fees to the prevailing party. When Congress was

considering revisions to the copyright laws in 1976,

Congress was informed that courts applying that

crease the future availability of pro bono counsel to impecunious

litigants.” /bid.

provision generally declined to award fees in cases

where the losing side’s position was reasonable. Be-

cause that pattern of judicial decisions was brought to

Congress’s attention, Congress’s re-enactment in 1976

of substantially similar discretionary language indi-

cates approval of the pre-existing framework. Treat-

ing objective reasonableness as a particularly signifi-

cant factor is also consistent with usual understand-

ings of other discretionary fee-shifting provisions.

And that approach is highly workable, since the dis-

trict court in assessing the reasonableness of the los-

ing side’s arguments can draw on its prior experience

in adjudicating the case on the merits.

3. Contrary to petitioner’s contentions, the Second

Circuit’s approach leaves district courts with adequate

discretion and is fully consistent with Fogerty. The

Second Circuit has consistently recognized that, al-

though the reasonableness of the losing side’s position

weighs substantially against a Section 505 fee award,

the district court should consider all relevant factors

and will sometimes be justified in awarding fees even

when the losing party’s arguments were reasonable.

The Second Circuit’s standard is facially neutral as

between plaintiffs and defendants, and petitioner fails

to substantiate his contention that courts within the

circuit have applied that standard in a skewed fashion.

B. Petitioner contends that fees under Section 505

should routinely be awarded in cases that ultimately

produce important appellate precedents. That ap-

proach should be rejected.

1. Nothing in Fogerty—a case in which the under-

lying infringement suit did not produce any preceden-

tial opinion at all on the merits of the infringement

issue—supports petitioner’s approach. Rather, the

Court in that case simply recognized that the success-

ful defense of an infringement suit can serve the Cop-

yright Act’s purposes by enabling the defendant to

exploit the expressive work that was (wrongly) alleged

to be infringing. Petitioner’s approach logically sug-

gests that Copyright Act fees should be more readily

awarded in cases where appeals are taken (since only

an appellate court can issue a precedential opinion);

but petitioner cites no case law drawing that distinc-

tion under Section 505 or any other federal fee-

shifting provision. And because a court’s rejection of

unreasonable arguments simply reaffirms (rather

than meaningfully clarifies) the contours of copyright

law, petitioner’s approach would have the peculiar

effect of treating the reasonableness of the losing

side’s position as a factor favoring a fee award.

2. Even if this Court views the generation of copy-

right precedent as a specific objective of Section 505,

it is wholly unclear whether adoption of petitioner’s

proposed fee-shifting approach would have that effect.

Under petitioner’s approach, each litigant in a close

case would have greater cause for optimism that it

could recoup its own fees if it prevailed, but also

greater cause for concern that it would be required to

pay its adversary’s fees if it lost. It is entirely specu-

lative whether the incentive or disincentive effects of

such a regime would predominate.

3. Petitioner’s proposed standard would be diffi-

cult to administer. Whereas the district court’s prior

experience in adjudicating a case on the merits will

bear directly on the determination whether the losing

side’s arguments were reasonable, the court may have

no particular insight into the jurisprudential or practi-

eal significance of any subsequent ruling on appeal.

C. The judgment of the court of appeals should be

affirmed, since the district court did not abuse its

discretion in declining to award fees in this case. The

district court’s analysis of the relevant factors, and its

ultimate conclusion that a fee award was not warrant-

ed, reflected a sound exercise of discretion under an

appropriate legal standard.

ARGUMENT

A. The Second Circuit's Interpretation Of Section 505 Is

Correct

1. Under the “American Rule,” the “prevailing liti-

gant is ordinarily not entitled to collect a reasonable

attorneys’ fee from the loser.” Alyeska Pipeline Serv.

Co. v. Wilderness Soc’y, 421 U.S. 240, 247 (1975); see

Fogerty v. Fantasy, Inc., 510 U.S. 5i7, 533 (1994).

“(T]he circumstances under which attorneys’ fees are

to be awarded and the range of discretion of the

courts in making those awards are matters for Con-

gress to determine.” Alyeska Pipeline, 421 U.S. at

262.

The Copyright Act provides that a district court

“may * * * award a reasonable attorney’s fee to the

prevailing party as part of the costs.” 17 U.S.C. 505.

“The word ‘may’” in Section 505 “clearly connotes

discretion.” Fogerty, 510 U.S. at 533. Courts consid-

ering fee petitions under Section 505 thus have signif-

icant latitude to decide whether fees are justified

under the circumstances of a particular case. See id.

at 534.

Although Section 505 does not establish any “pre-

cise rule or formula” for determining whether fees

should be awarded in a particular case, Fogerty, 510

U.S. at 534 (citation omitted), “in a system of laws

discretion is rarely without limits.” /ndependent

Fed’n of Flight Attendants v. Zipes, 491 U.S. 754, 758

(1989). In Fogerty, this Court cited with approval

“several nonexclusive factors”—‘“frivolousness, moti-

vation, objective unreasonableness (both in the factual

and the legal components of the case) and the need in

particular circumstances to advance considerations of

compensation and deterrence”—that lower courts had

considered relevant to a district court’s exercise of

discretion under Section 505. 510 U.S. at 534 n.19

(citation omitted); see Octane Fitness, LLC v. ICON

Health & Fitness, Inc., 134 S. Ct. 1749, 1756 n.6 (2014)

(citing Fogerty’s list of factors). The Fogerty Court

explained that “such factors may be used to guide

courts’ discretion,” so long as they are “faithful to the

purposes of the Copyright Act and are applied to

prevailing plaintiffs and defendants in an evenhanded

manner.” 510 U.S. at 534 n.19; see generally Zipes,

491 U.S. at 758, 760-761.

In identifying the Copyright Act’s “purposes,” the

Fogerty Court explained that “copyright law ultimate-

ly serves the purpose of enriching the genera! public

through access to creative works.” 510 U.S. at 527.

The Court deemed it “peculiarly important that the

boundaries of copyright law be demarcated as clearly

as possible,” and it explained that “a successful de-

fense of a copyright infringement action” serves “that

end * * * every bit as much as a successful prosecu-

tion of an infringement claim.” /bid. For that reason,

“defendants who seek to advance a variety of merito-

rious copyright defenses should be encouraged to

litigate them to the same extent that plaintiffs are

encouraged to litigate meritorious claims of infringe-

ment.” Jbid.

2. In determining whether attorney’s fees should

be awarded under Section 505, the Second Circuit

correctly gives “substantial weight” to the objective

reasonableness of the losing side’s position, while

recognizing that other relevant circumstances may

support a fee award even when the losing party’s

position was reasonable. Pet. App. 4a-5a. At least

three of the factors identified as relevant in Fogerty—

“frivolousness,” “objective unreasonableness,” and the

need for “deterrence,” 510 U.S. at 534 n.19—are di-

rectly implicated when the losing party’s litigating

position was unreasonable. The Second Circuit’s

approach serves the purposes of the Copyright Act, is

in keeping with long-established practice in copyright

cases, harmonizes the interpretation of Section 505

with judicial interpretations of other fee-shifting pro-

visions, and ensures that district courts can workably

administer Section 505.”

a. The Second Circuit’s approach furthers the pur-

poses of the Copyright Act.

Emphasizing the objective reasonableness of the

losing side’s position creates appropriate litigating

incentives. In cases where one party’s position is

clearly correct, that fee-shifting approach gives the

party greater confidence that it can economically

litigate the case to its conclusion, thereby achieving

the result to which it is entitled under the Copyright

Act. The Second Circuit’s approach also deters the

assertion of unreasonable litigating positions, and the

* As petitioner recognizes (Pet. Br. 50-52), the approach taken

by the Fifth and Seventh Circuits, which presume (at least in

certain circumstances) that the prevailing party is entitled to an

award of fees under Section 505, is inconsistent with Fogerty’'s

rejection of the British Rule, see 510 U.S. at 533.

continued assertion of such positions after their lack

of merit has been demonstrated. At the same time, it

avoids the undue disincentive to the assertion of rea-

sonable litigating positions, and the concomitant pres-

sure to settle or abandon potentially meritorious

claims or defenses, that might result if losing copy-

right litigants were routinely required to pay their

opponents’ fees.

Deterrence of unreasonable arguments and en-

couragement of reasonable ones is a fully “evenhand-

ed” approach. Fogerty, 510 U.S. at 534 n.19. The

question whether a litigating position is objectively

unreasonable may be asked equally of both sides.

Accordingly, neither plaintiffs nor defendants are

favored, and each is “encouraged to litigate * * * to

the same extent.” /d. at 527; see, e.g., Bauer v. Yellen,

375 Fed. Appx. 154, 156-157 (2d Cir. 2010) (upholding

decision to award fees to prevailing defendant when

the losing plaintiff’s position was not objectively rea-

sonable); Mallery v. NBC Universal, Inc., 331 Fed.

Appx. 821, 823 (2d Cir. 2009) (same), cert. denied, 559

U.S. 1101 (2010); Bryant v. Media Right Prods., Inc.,

603 F.3d 135, 144 (2d Cir.) (affirming denial of fee

award to prevailing plaintiffs where losing defendants

made objectively reasonable arguments), cert. denied,

562 U.S. 1064 (2010); Resp. Br. 45; see generally Mat-

thew Bender & Co. v. West Publ’g Co., 240 F.3d 116,

121 (2d Cir. 2001) (“the standard governing the award

of attorneys’ fees under section 505 should be identical

for prevailing plaintiffs and prevailing defendants”).

The Second Circuit’s approach preserves flexibil-

ity. Cases may arise in which the purposes of the

ing party who advanced a reasonable position to pay

the prevailing party’s fees. Because the Second Cir-

cuit treats the objective reasonableness of the losing

party’s position as a factor entitled to “substantial

weight,” rather than as a categorical bar to a fee

award, courts retain discretion to award fees in such

cases. See, e.g., Viva Video, Inc. v. Cabrera, 9 Fed.

Appx. 77, 80 (2d Cir. 2001) (addressing abusive litiga-

tion conduct by party with objectively reasonable

position).

b. The Second Circuit’s identification of objective

reasonableness as a central factor in the fee analysis

is also consistent with longstanding Copyright Act

practice. The sequence of events that led to the en-

actment of Section 505 in 1976 strongly suggests that

Congress intended to ratify that practice.

The Copyright Act of 1909 provided that “the court

may award to the prevailing party a reasonable attor-

ney’s fee as part of the costs.” § 40, 35 Stat. 1084. In

1947, when the Copyright Act was codified in Title 17

of the U.S. Code, that language was retained without

change. See 1947 Act, § 116, 61 Stat. 665.

When Congress subsequently undertook a “genera!

revision of the copyright law,” it authorized the Copy-

right Office to study possible legislative approaches,

and that Office assumed substantial responsibility for

drafting the proposals that became the 1976 Act.

Mills Music, Inc. v. Snyder, 469 U.S. 153, 159 (1985);

see Community for Creative Non-Violence v. Reid,

490 U.S. 730, 743-748 (1989). The Office issued a se-

ries of “studies on major issues of copyright law.”

Mills Music, 469 U.S. at 159. One of those studies

explained that courts applying the then-extant copy-

right fee-shifting provision “do not usually make an

allowance at all if an unsuccessful plaintiff’s claim was

not ‘synthetic, capricious or otherwise unreasonable,’

or if the losing defendant raised real issues of fact or

law.” Fogerty, 510 U.S. at 528, 531 (quoting Ralph S.

Brown, Jr., Study No. 23, The Operation of the Dam-

age Provisions of the Copyright Law: An Explorato-

ry Study, reprinted in Staff of the Subcomm. on Pa-

tents, Trademarks, and Copyrights, House Comm. on

the Judiciary, 86th Cong., 2d Sess., Copyright Law

Revision: Studies 85 (Comm. Print 1960) (Brown

Study)); see Brown Study 85 (“Several experienced

practitioners said that they seldom received fee allow-

ances, nor were their clients compelled to pay allow-

ances, because the only cases they took to court in-

volved unsettled questions of law or fact, and they did

not expect the court to make an allowance to either

side.”); see also Fogerty, 510 U.S. at 528-529 (discuss-

ing additional Copyright Office study relevant to at-

torney’s fees). The Register of Copyrights expressed

the same understanding, stating that “[t]he courts

have generally denied awards of attorney’s fees where

the losing party had solid grounds for litigating his

claim or defense.” Report of the Register of Copy-

rights on the General Revision of the U.S. Copyright

Law 109 (Comm. Print 1961) (House Comm. on the

Judiciary, 87th Cong., 1st Sess.).°

* This Court's decision in Fogerty cited a number of pre-1976

cases, all of which are consistent with the Copyright Office’s sum-

mary. See Fogerty, 510 U.S. at 529-532 nn.14-17 (citing, e.¢.,

Official Aviation Guide Co. v. American Aviation Assocs., 162

F.2d 541, 543 (7th Cir. 1947) (denying fees where the case “was

hard fought and prosecuted in good faith, and * * * presented a

complex problem in law”), and Loew's Inc. v. Columbia Broad.

Sys., Inc., 131 F. Supp. 165, 186 (S.D. Cal. 1955) (denying fees to

prevailing defendant where merits issue “was a nice one” and

there were “no authorities squarely in point”), aff’d, 239 F.2d 532

When it enacted Section 505 as part of the 1976

Act, Congress thus was made aware that the reasona-

bleness of the losing party’s position on the merits

was a significant factor in the discretionary analysis

under earlier provisions authorizing awards of attor-

ney’s fees in copyright cases. See Mills Music, 469

U.S. at 159-160 (noting importance of Copyright Office

studies and views in the enactment of the 1976 Act);

see also Fogerty, 510 U.S. at 523-524. Congress chose

not to “amend the neutral langusge” under which that

approach had developed. Fogerty, 510 U.S. at 524

n.ll. With respect to fees, Congress retained the

existing language even though the 1976 Act changed

another aspect of the cost-shifting regime, by making

an award of non-tee costs discretionary rather than

mandatory. Compare 17 U.S.C. 116 (1976) (“full costs

shall be allowed”), with 17 U.S.C. 505 (“the court in its

discretion may allow the recovery of full costs”); see

generally Community for Creative Non-Violence, 490

U.S. at 743 (noting that in most respects the 1976 Act

“almost completely revised existing copyright law”).

Under those circumstances, “Congress is presumed

* * * to adopt” the existing “judicial interpretation”

of the statutory language it re-enacts. Lorillard v.

Pons, 434 U.S. 575, 580-581 (1978). That principle

applies with special force where, as here, Congress

has left the relevant language intact while significant-

ly altering closely related aspects of the statute. See,

e.g., Merrill Lynch, Pierce, Fenner & Smith, Inc. v.

Curran, 456 U.S. 353, 381-382 (1982). Treating the

objective reasonableness of the losing side’s argu-

(9th Cir. 1956), aff'd, 356 U.S. 43 (1958)); see also Norbay Music,

Inc. v. King Records, Inc., 249 F. Supp. 285, 289-290 (S.D.N.Y.

1966); Resp. Br. 25 & n.3 (citing additional cases).

ments as a factor weighing substantially against a

“usual[]” outcomes that Congress would have ex-

pected when it enacted Section 505. See Fogerty, 510

U.S. at 531 (quoting Brown Study 85).*

c. The Second Circuit’s approach is also consistent

with usual understandings of discretionary fee-

shifting provisions outside the copyright context.

Under a wide array of discretionary federal fee-

shifting provisions, the reasonableness of the losing

side’s position is consistently treated as a factor

weighing against an award. The Court has applied

that approach in construing provisions (like Section

505) that authorize fee awards but provide little or no

explicit guidance as to the criteria that should inform

the court’s decision. See, e.g., Martin v. Franklin

Capital Corp., 546 U.S. 132, 141 (2005) (explaining

that “when an objectively reasonable basis [for the

losing litigant’s action] exists, fees should be denied”)

(interpreting 28 U.S.C. 1447(c)); Octane Fitness, 134

S. Ct. at 1756 (explaining that “the unreasonable man-

ner in which the case was litigated” may inform a

court’s decision whether to award fees) (interpreting

35 U.S.C. 285).° Courts have interpreted such provi-

* In Fogerty, this Court rejected the argument that the 1976

Congress had ratified the “dual” standard for fees, which treated

plaintiffs more favorably than defendants. See 510 U.S. at 527-533.

The Court explained that “neither of the two studies presented to

Congress, nor the cases referred to by the studies, support [the]

view that there was a settled construction in favor of the ‘dual

standard’ under” pre-1976 law. /d. at 533.

* See also, e.g., American Council of Certified Podiatric Physi-

cians & Surgeons v. American Bd. of Podiatric Surgery, Inc., 185

F.3d 606, 625 (6th Cir. 1999) (explaining that, “[wJhere a plaintiff

sues under a colorable, yet ultimately losing, argument, an award

sions—which are enacted against the “strong back-

ground of the American rule,” Fogerty, 510 U.S. at

533—to “demand some scope for the exercise of dis-

cretion to measure the reasonableness of the losing

party’s conduct and make no award if that conduct

was reasonable.” Thomas D. Rowe, Ji., The Legal

Theory of Attorney Fee Shifting: A Critical Over-

view, 1982 Duke L.J. 651, 670 (1982); see 1 Mary

Frances Derfner & Arthur D. Wolf, Court Awarded

Attorney Fees % 5.02 [1], at 5-4 (2015).

The wording of 28 U.S.C. 1447(c), the provision at

issue in Martin, is particularly similar to that of Sec-

tion 505. Section 1447(c) provides that, if a state-court

suit is removed to federal court but subsequently

remanded to state court, the “order remanding the

case may require payment of * * * attorney fees,

incurred as a result of the removal.” Like Section 505,

that provision uses the permissive word “may” with-

out specifying the criteria that should inform the

court’s exercise of discretion. The Court in Martin

held that, “{aJbsent unusual circumstances, courts

may award attorney’s fees under § 1447(c) only where

thc removing party lacked an objectively reasonable

basis for seeking removal.” 546 U.S. at 141. The

Court recognized that district courts could depart

of attorney’s fees is inappropriate”) (interpreting 15 U.S.C. 1117(a)

(1994 & Supp. V 1999)); Ahng v. Allsteel, Inc., 96 F.3d 1033, 1037

(7th Cir. 1996) (explaining that “attorney’s fees should not be

awarded if the losing party’s position is substantially justified and

taken in good faith”) (interpreting 29 U.S.C. 1132(g)(1)) (citation

and internal quotation marks omitted); Taz Analysts v. United

States Dep't of Justice, 965 F.2d 1092, 1096 (D.C. Cir. 1992) (af-

firming denial of fees where the government’s position, while not

prevailing, “had a reasonable basis in law”) (interpreting 5 U.S.C.

552(a)(4)(E) (1988)).

from that rule in unusual cases, but cautioned that the

grounds for any such departure “should be ‘faithful to

the purposes’ of awarding fees under § 1447(c).” Jbid.

(quoting Fogerty, 510 U.S. at 534 n.19). The Second

Circuit’s approach to fee awards under Section 505 is

substantially similar.

Petitioner views Martin as inapposite because the

Court in that case focused on the policy balance that

Section 1447(c) is intended to strike. See Pet. Br. 34-

35. But there is no sound reason to regard the balanc-

ing of interests that the Court in Martin described—

i.e., deterring unreasonable or ill-motivated removals,

without unduly discouraging removals that are rea-

sonable but not certain to succeed, see 546 U.S. at

140-141—as different in kind from the objectives that

underlie Section 505. That is particularly so because

the Court in Martin did not cite legislative history of

Section 1447(c), or any other extrinsic statute-specific

evidence, in concluding that Congress intended to

strike that policy balance. Rather, the Court inferred

that intent from Congress’s decision to authorize, but

not require, awards of fees to plaintiffs in remanded

cases. See ibid.°

d. Treating the reasonableness of the losing par-

ty’s position as a central factor in the Section 505

inquiry is also a highly workable approach. A district

° Unlike Section 505, Section 1447(c) is not even-handed: it au-

thorizes an award of fees where the defendant’s attempt to remove

a case is ultimately unsuccessful, but not where the defendant

successfully resists the plaintiff’s effort to have the case remanded

to state court. Nothing in Martin suggests, however, that this

aspect of the provision meaningfully influenced the Court’s articu-

lation of the criteria that should inform district courts’ fee deci-

sions.

court that has presided over the merits portion of a

ments and is well situated to assess whether the losing

party advanced a reasonable position. And the ques-

tion whether a losing party’s position is objectively

unreasonable may be asked in every case, no matter

the kind of claims or defenses involved. The Second

Circuit’s standard therefore gives district courts clear

and administrable guidance that will increase the

consistency of fee determinations in similar cases.

See Fogerty, 510 U.S. at 534 n.19 (referring to “fac-

tors” that “may be used to guice courts’ discretion”);

see also Albemarle Paper Co. v. Moody, 422 U.S. 405,

417 (1975).

3. a. Petitioner argues (Pet. Br. 23) that the Sec-

ond Circuit’s standard “improperly pretermits district

court discretion.” That criticism is unfounded.

By selecting one of the factors listed in Fogerty as

a central element in “guid{ing] courts’ discretion”

under Section 505, Fogerty, 510 U.S. at 534 n.19, the

Second Circuit has followed this Court’s direction, not

flouted it. Fogerty made clear that such guidance is

permissible so long as the factor is an appropriate one.

See ibid.; cf. Zipes, 491 U.S. at 760-761 (stating that

“the law in general, and the law applied to” an

attorney’s-fee provision in the civil rights laws afford-

ing district courts facially unqualified “discretion,”

does not “interpret a grant of discretion to eliminate

all ‘eategorical rules’”); Martin, 546 U.S. at 139-140

(quoting Zipes and applying the same principle). And

because the Second Circuit has consistently recog-

nized that fee awards under Section 505 may some-

times be appropriate even when the losing party’s

position was objectively reasonable, see, e.g., Pet.

App. 4a-5a, its approach is consistent with this Court’s

avoidance of single-factor tests in similar statutory

contexts.

Petitioner asserts (Pet. Br. 24-25) that the Second

Circuit has “repeatedly” denied fee requests in copy-

right cases “based solely on the determination that

the losing plaintiff’s position was objectively reasona-

ble.” But in the cases that he cites “affirm[ing] dis-

trict court decisions denying attorney’s fees to pre-

vailing defendants” (Pet. Br. 24 & n.2), the court of

appeals made clear that multiple factors are relevant

to the Section 505 analysis.’ And the two rulings that

" See Viva Video, 9 Fed. Appx. at 81 (partially affirming denial

of fee award where losing plaintiff’s case “had some support at the

time it was initiated” and plaintiff did not generally display bad

faith, despite ultimately being “unable to support its claims,” but

partially vacating order after concluding that prevailing defend-

ants were eligible for fees arising out of particular instance of

litigation misconduct); see also Russian Entm't Wholesale, Inc. v.

Close-Up Int'l, Inc., 482 Fed. Appx. 602, 607 (2d Cir. 2012) (observ-

ing that losing plaintiff's arguments “were neither legally nor

factually unreasonable,” and that the district court “could reason-

ably have considered” the plaintiff's “purported rejection of a

reasonable settlement offer” when deciding whether to award

fees); Arista Records, LLC v. Launch Media, Inc., 344 Fed. Appx.

648, 650-651 (2d Cir. 2009) (explaining that the losing plaintiff's

position was not objectively unreasonable, and that “there appears

to be no illegal motivation on the part of [the plaintiff] to bring the

suit, nor any conduct that would merit deterrence”); Lava Records,

LLC v. Amurao, 354 Fed. Appx. 461, 462 (2d Cir. 2009) (concluding

that the district court appropriately denied fees to a prevailing

defendant “in light of, inter alia, the evidence plaintiffs possessed

pointing to [defendant] as the infringing party prior to filing suit”

and defendant’s “less-than-candid responses to plaintiffs’ discovery

requests”); Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc.,

290 F.3d 98, 117 (2d Cir. 2002) (affirming denial of fees where the

he claims “reversed district court decisions awarding

attorney’s fees to prevailing defendants * * * based

solely on the court’s determination that the plaintiff’s

litigation position was objectively reasonable” (Pet.

Br. 25 & n.3 (emphasis omitted)) did no such thing.

Indeed, in one of those cases, the court of appeals—

while vacating an existing fee award infected by “logi-

cally inconsistent” reasoning—remanded for the dis-

trict court to consider whether the _plaintiff’s

“{mJisconduct before or during litigation” might war-

rant an award of fees to the prevailing defendants

even though the plaintiff’s position on the facts and

law in the operative complaint “was objectively rea-

sonable.” Zalewski v. Cicero Builder Dev., Inc., 754

F.3d 95, 108-109 (2d Cir. 2014) (citation omitted); see

Effie Film, LLC v. Murphy, No. 14-3367-ev, 2015 WL

6079993, at *1-*2 (2d Cir. Oct. 16, 2015) (ruling that

district court’s award of fees to a plaintiff that had

obtained a deciaratory judgment of non-infringement

constituted an abuse of discretion because the fee

award was “based * * * solely” on the mistaken

belief that the “pro se” defendant’s arguments were

unreasonable).

Petitioner is also wrong in accusing (Pet. Br. 25-27)

the Second Circuit of effectively adopting an “excep-

tional case” standard similar to that expressly set

forth in the attorney’s-fee provisions of the Patent

Act, 35 U.S.C. 1 et seg., and the Lanham Act, 15

U.S.C. 1051 et seq. As this Court explained in Octane

Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.

Ct. 1749 (2014), when the “power” to award attorney’s

fees is “reserved for ‘exceptional’ cases,” a court must

district court “rel{ied] on factors outlined by the Supreme Court in

Fogerty”).

ask whether the case before it “stands out from others

with respect to the substantive strength of a party’s

litigating position * * * or the unreasonable manner

in which the case was litigated.” /d. at 1756; see id. at

1753 (explaining that addition of the word “exception-

al” to the Patent Act did not alter the meaning of the

existing provision). Giving substantial weight in an

attorney’s-fee analysis to the reasonableness of the

losing party’s position does not call for any such com-

parison between cases, or reserve an award of fees for

cases that stand out from the norm. Rather, it calls

for a case-specific assessment of whether the losing

party’s position lacks a basis in fact or law—

regardless of whether any such unreasonableness is

ordinary or exceptional in nature.

b. Petitioner asserts that the Second Circuit’s

standard “flouts Fogerty’s evenhandedness require-

ment” by adopting a “punishment-based approach”

under which “a defendant who has infringed will vir-

tually always be found to have done something culpa-

ble” while “a plaintiff who wrongly accuses a defend-

ant of infringement will be viewed as culpable only if

the lawsuit is frivolous.” Pet. Br. 27, 29 (emphasis

omitted). That is incorrect.

Petitioner’s argument confuses the question of in-

fringement liability with the reasonableness of a par-

ty’s litigating position. As in other litigation contexts,

the defendant in a copyright-infringement suit may

lose on the merits yet be found to have advancec ob-

jectively reasonable arguments. Courts in the Second

Circuit have denied Section 505 fee requests on that

basis. See, e.g., Bryant, 603 F.3d at i44. To be sure,

because a finding of infringement indicates that the

defendant has violated the law, a losing copyright

defendant is “culpable” in a way that a losing plaintiff

is not. That difference explains why losing defend-

ants, but not losing plaintiffs, may be required to pay

damages at the conclusion of infringement suits.

Consistent with Fogerty’s holding that Section 505

mandates an even-handed approach, however, the

Second Circuit has not treated that form of culpability

as a basis for a fee award.

Relying on a small number of secondary sources,

petitioner contends that the Second Circuit’s standard

unduly favors plaintiffs in practice. Even if petitioner

could identify cases other than this one in which the

Second Circuit (or district courts within that circuit)

have failed to apply an even-handed approach, that

showing would provide no basis for reversing the

judgment below or for rejecting the standard that the

Second Circuit has articulated. In any event, the

sources that petitioner cites do not support his charac-

terization.

Petitioner relies (Pet. Br. 28-29) on a survey pub-

lished in 2000 that considered 135 decisions issued

“in a fifty-two month period following” this Court’s

1994 decision in Fogerty. Jeffrey Edward Barnes,

Comment, Attorney’s Fee Awards in Federal Copy-

right Litigation After Fogerty v. Fantasy: Defend-

ants Are Winning Fees More Often, but the New

Standard Still Favors Prevailing Plaintiffs, 47

UCLA L. Rev. 1381, 1387 (2000) (Barnes Comment);

see id. at 1403; see also Pet. Br. 28 (citing John Teh-

ranian, Curbing Copyblight, 14 Vand. J. Ent. & Tech.

L. 993, 1016 (2012) (relying on Barnes Comment)).

But that survey found that “the frequency of prevail-

ing defendants’ fee awards jumped from 16 percent

before Fogerty to 61 percent following the ruling,” and

that the increase in the Second Circuit (from 12.5% to

80%) was particularly striking. Barnes Comment

1383, 1390-1391 (Tbl. 1); see id. at 1383 (stating that

rates of fee awards to plaintiffs “remained the same”

throughout this period at 89%).°

Petitioner also relies (Pet. Br. 28-29) on a copyright

treatise stating that a standard emphasizing objective

reasonableness perpetuates “the dual system rejected

in Fogerty.” But the treatise primarily rests that

statement on what it deems a faulty conception of

unreasonableness—one that is too close to the “frivo-

lous[ness]” or “bad faith” that the dual standard re-

quired prevailing defendants to demonstrate in order

to obtain a fee award. Fogerty, 510 U.S. at 520-521;

see William F Patry, 6 Patry on Copyright § 22:210

(2015) (citing Browne v. Greensleeves Records, Ltd.,

No. 03 Civ. 7696, 2005 WL 2716568, at *1 (S.D.N.Y.

Oct. 21, 2005) (stating that claims are “generally”

objectively unreasonable only if they “are clearly

without merit or otherwise patently devoid of legal or

factual basis”)). The numerous cases in which Section

505 fees have been awarded (and fee awards affirmed)

by courts in the Second Circuit suggest that a showing

of objective unreasonableness is not overly difficult to

make. And even if courts in the Second Circuit were

unduly reluctant to find particular litigating positions

* A somewhat higher rate of fee awards to prevailing plaintiffs

than to prevailing defendants does not indicate a failure of even-

handedness. Defendants are brought into court unwillingly, while

plaintiffs can evaluate the legitimacy of their claims before com-

mitting the time and resources required to initiate a federal suit.

Accordingly, a standard that tests all parties’ positions against the

same objective-reasonableness yardstick may result in a greater

prevalence of fee awards to plaintiffs.

objectively unreasonable, that fact would not suggest

that the standard itself is flawed or that plaintiffs and

defendants are being treated differently. Respond-

ent’s merits position in this case, which prevailed in

both lower courts and was endorsed by three Mem-

bers of this Court, was objectively reasonable under

any plausible conception of that term.

B. Petitioner's Interpretation Of Section 505 Should Be

Rejected

Petitioner agrees (Pet. Br. 14-17, 35-36, 48-49, 52-

53) that a court’s discretion to award fees may appro-

priately be “guided by a touchstone,” and that the

reasonableness of the losing party’s litigating position

may properly bear on the Section 505 analysis. He

contends, however, that district courts should exercise

their discretion under Section 505 to reward the vic-

tors in close cases that yield important judicial

pronouncements—an approach that he believes would

encourage “meaningful[] clarifi{cation}” of copyright

law. Id. at 19-21, 35-50. That approach suffers from

numerous flaws.

1. Petitioner’s approach finds no support in Foger-

ty. The Court there stated that, because “the policies

served by the Copyright Act are more complex, more

measured, than simply maximizing the number of

meritorious suits for copyright infringement,” a de-

termination that particular expression is not infring-

ing serves the Act’s purposes just as much as a deci-

sion that upholds a copyright-holder’s claim. 510 U.S.

at 526; see id. at 525-527. The Court explained that,

“filn the case before [it], the successful defense of

‘The Old Man Down the Road’ [the song that was

alleged to be infringing] increased public exposure to

a musical work that could, as a result, lead to further

creative pieces.” /d. at 527. In stating that “a suc-

cessful defense of a copyright infringement action may

further the policies of the Copyright Act,” ibid., the

Court thus focused on the fact that the judgment in

the underlying infringement suit had enabled the

defendant to exploit a particular creative work, not on

any more general] law-clarifying effect that a prece-

dential opinion might produce. Indeed, because the

infringement suit in Fogerty culminated in a jury

verdict for the defendant that the plaintiff did not

appeal, see zd. at 520, the suit did not generate a prec-

edential opinion on any question concerning the mer-

its of the infringement claim.

Petitioner’s focus on the precedent-setting effect of

the Court’s merits-stage decision in this case logically

suggests that Copyricht Act fees should be more

readily awarded in cases involving an appeal of a dis-

trict court’s merits decision (at least if the appellate

court issues a published decision), and even more

readily awarded in cases that reach this Court. Cf.

Pet. Br. 41 (“The truth is some wins are better than

others.”). Nothing in the text of Section 505 indicates

that appellate victories provide a stronger basis for a

fee award than unappealed trial-court wins, however,

and the government is not aware of any judicial deci-

sion that has endorsed that distinction. Petitioner

also identifies no other federal fee-shifting provision

under which the creation of appellate precedent is

treated as a factor supporting a fee award.

Petitioner’s approach would also have the peculiar

effect of treating the reasonableness of the losing

side’s merits position as a factor favoring a fee award.

In stressing the jurisprudential significance of the

Court’s merits decision in this case, petitioner affirm-

atively relies on the fact that, before that decision,

most courts and commentators had believed respond-

ent’s position to be correct. See Pet. Br. 2, 7; but cf.

id. at 49 (accepting that fee awards are warranted if

the losing party’s position is frivolous). By contrast,

because unreasonable arguments are (by definition)

those that litigants should already know are wrong,

their rejection—even in a published opinion—is un-

likely to serve any meaningful law-clarifying function.

That treatment of the reasonableness factor is impos-

sible to square with Fogerty, which contemplates that

a losing argument’s “objective unreasonableness” will

weigh in favor of a fee award, and it is in stark con-

trast with the role that objective reasonableness ordi-

narily plays under other discretionary federal fee-

shifting statutes. Fogerty, 510 U.S. at 534 n.19 (cita-

tion omitted); see pp. 19-21, supra.

2. Even if Congress intended in Section 505 to en-

courage litigation of potentially precedent-setting

cases, petitioner’s approach to fee awards would not

reliably effectuate that intent.

In deciding whether to proceed to judgment in the

district court or to pursue and fully litigate an appeal,

each party can be expected to view the possible re-

coupment of its own fees as an incentive to go forward,

while regarding the risk of a fee award against it as a

cause for hesitation. A regime under which fees are

routinely awarded in precedent-setting copyright

litigation thus could discourage as well as encourage

the pressing of arguments on appeal. The problem is

not simply that precedent-setting litigation requires

two willing parties, and that the party that ultimately

loses might have abandoned the suit if the perceived

risk of an adverse fee award had been higher. See

Pet. Br. 30. In addition, the rule that petitioner advo-

cates would deter many litigants who would otherwise

have pursued appeals and would ultimately have

prevailed. See Resp. Br. 33.

The circumstances of this case illustrate the diffi-

culties with petitioner’s approach. If petitioner’s

proposed fee-shifting framework had been in place

when he was deciding whether to petition for certiora-

ri, he would have faced strong disincentives to seeking

this Court’s review. In petitioner’s telling (Pet. Br. 2,

7, 9, 11), litigation in this Court was a “long-shot”

campaign against a “copyright goliath” represented

by elite counsel. And because petitioner’s Supreme

Court counsel had agreed to provide pro bono repre-

sentation, the prospect of having his own fees reim-

bursed would have been little incentive to proceed. By

contrast, the risk of having to pay respondent’s fees as

a consequence of losing, notwithstanding the reasona-

bleness of petitioner’s arguments, could well have

deterred him from pursuing this Court’s review at all.

At that stage of the proceedings, it would hardly have

been obvious even to petitioner himself that he would

ultimately land among “the Kirtsaengs” (Pet. Br. 3) of

This is not to say that adoption of petitioner’s ap-

proach would demonstrably reduce the overall inci-

dence of law-clarifying copyright litigation. The point

is simply that the approach would create disincentives

as well as incentives to pursuing cases on appeal, and

it is wholly speculative whether the incentive effects

would predominate. Thus, even if this Court views the

generation of copyright precedent as an objective of

Section 505, there is no sound reason to believe that

petitioner’s proposed fee-shifting standard would have

that systemic effect.

3. Petitioner’s proposed standard also would be

difficult for district courts to administer. Petitioner

envisions (Pet. Br. 15, 33, 41-44) that a prevailing

party seeking fees would attempt to “demonstrate”

the “broad applicability” of the result in its case, while

the losing party would try to establish that the case

involved merely “localized facts” or that the result

only “meaningfully deterred infringement in a par-

ticular industry.” But the question whether a particu-

lar result warrants a fee award under that approach

would frequently be subject to conjecture and specula-

tion. It will often be difficult for a district court to

assess the precedent-setting value of a decision, or to

gauge the effects of that decision on the relevant in-

dustry. Indeed, the practical importance of a particu-

lar ruling on the merits might not become apparent

until long after the court makes its attorney’s-fee

determination.

In assessing the objective reasonableness of the

losing party’s arguments, a district court can draw

directlv on the knowledge that it has acquired during

the merits phase of the litigation. See pp. 21-22, sw-

pra. The district court’s experience with the case,

however, often will give it no particular insight into

the jurisprudential or practical significance of any

subsequent ruling on appeal. To assess the ultimate

law-clarifying value of the lawsuit, the court may be

required to conduct a wide-ranging survey of the

pertinent factual and legal landscape, an inquiry ex-

tending far beyond what was needed to try the case on

the merits. An approach that entails such inquiries

would directly implicate the concern that “[a] request

for attorney’s fees should not result in a second major

litigation.” Hensley v. Eckerhart, 461 U.S. 424, 437

(1983); see Zipes, 491 U.S. at 766 (declining to adopt a

proposed framework for awarding fees when “making

fees turn upon [the proponent’s criteria] would violate

our admonition” in Hensley).

C. The Judgment Of The Court Of Appeals Should Be

Affirmed

As the Second Circuit correctly held, the district

court’s denial of petitioner’s request for attorney's

fees was not an abuse of discretion. The district court

observed (and petitioner does not dispute) that re-

spondent’s merits arguments were reasonable, Pet.

App. 12a-14a; that respondent had “brought this ac-

tion based on its belief that, given then-existing legal

interpretations of the Copyright Act,” petitioner had

infringed respondent’s rights, id. at 17a; that re-

spondent’s litigation conduct was appropriate under

the circumstances, id. at 15a & n.13; and that petition-

er had no special need for compensation because he

had been represented pro bono in this Court and

would be able to “continue his arbitrage business free

of the fear of incurring copyright liability,” id. at 16a.

The court also carefully considered each of the addi-

tional arguments that petitioner had raised, contra

Pet. Br. 3, including the argument that he was entitled

to fees because his suit had helped to clarify the law,

and determined that “no other factor” justified a fee

award, Pet. App. 24a; see id. at 17a-24a. The court’s

analysis of the relevant factors, and its ultimate con-

clusion that a fee award was not warranted, reflected

a sound exercise of discretion under an appropriate

legal standard.

CONCLUSION

The judgment of the court of appeals should be

affirmed.

Respectfully submitted.