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

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No. 15-375 $Y

IN THE

Supreme Court of the Anited States

SUPAP KIRTSAENG DBA BLUECHRISTINEY9Y,

Petitioner,

Vv.

JOHN WILEY & SONS, INC.,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF OF AMICUS CURIAE,

AMERICAN INTELLECTUAL PROPERTY LAW

ASSOCIATION IN SUPPORT OF NEITHER PARTY

DENISE W. DEFRANCO, BARBARA A. FIACCO

President Counsel of Record

AMERICAN INTELLECTUAL JENEVIEVE J. MAERKER

PROPERTY LAW EMMA S. WINER

ASSOCIATION FOLEY HOAG LLP

241 18 Street, South 155 Seaport Boulevard

Suite 700 Boston, MA 02210

Arlington, VA 22202 (617) 832-1000

(703) 415-0780 bfiacco@foleyhoag.com

March 7, 2016

TABLE OF CONTENTS

STATEMENT OF INTEREST..................::cccccccseeeeeeees 1

SUMMARY OF ARGUMENT ......................cccceseeeseeees 2

SITE citintnctonriasipariincincsimeteeitintintenssantionneninbsbinka 5

1. Section 505 of the Copyright Act

Il.

Confers Broad Discretion on the

District Court to Award Attorney’s

ee ee oe 5

This Court’s Guidance is Needed to

Address the Regional Circuits’

Inconsistent Approaches. ...................... 9

A. A Presumption in Favor of

Fee Awards Is Inconsistent

with Section 50B.................c0.0000. g

B. The Use of Weighted Factors

Is Inconsistent with Section

aS NERS 8 Ree tee ose ESET 11

Section 505 Requires a Totality-of-

the-Circumstances Analysis................ 14

A. The District Court May

Consider the Strength of the

Losing Party’s Position. ............ 15

B. The District Court May

Consider a Party’s

PI ent 18

C. “Considerations of

Compensation and

Deterrence” Include

Litigation Misconduct. .............. 19

D. The District Court Should

Consider the Purposes of the

OR TOD EPRBOT OCR, o0ccescccccceccsesess 21

Se EI schnisinnntrciniaiipeiddsdadepieliienebpnbinindnbeceteinntn 25

lil

TABLE OF AUTHORITIES

CASES

UNITED STATES SUPREME COURT CASES

Alyeska Pipeline Service Co. v. Wilderness

Boataty, 431 UB. BAO CGT .cecccccccsccccsessessseccosses 16

Campbell v. Acuff-Rose Music, Inc.,

es I I vccriccevncctincsasesceccbscccasees 11, 23, 24

Chambers v. NASCO, Inc.,

EUR a ee ae re Be Ree ee ea 16

Cooter & Gell v. Hartmarx Corp.,

i IO I irccricsicccioscccoctiessssasicctconsas 16, 19

eBay Inc. v. MercExchange, L.L.C.,

Re See I biiniasenssteronincivinessncinesaoreiice 10, 13, 14

Fogerty v. Fantasy, Inc.,

I I ae passim

Hecht Co v. Bowles,

ee 13

Hensley v. Eckerhart,

I es ov. ae

Holmberg v. Ambrecht,

er er or nee 15

Independent Federation of Flight Attendants

Oe Bi, GI TE, Fe Ce vrvcccenceieccicenseeoccecees. 21

Martin v. Franklin Capital Corp.,

DOB TD, BO I oicccccsvccscisscconcescoes 3, 7, 10, 24, 25

New York Times Co. v. Tasini,

OO I, ina cca ccesecuesons 10, 11

Octane Fitness, LLC v. ICON Health &

Fitness, Inc., 134 S. Ct. 1749 (2014) ............ passim

Precision Instrument Mfg. Co. v. Automotive

Maintenance Machine Co., 324 U.S. 806

Sony Corp. of America v. Universal City

Studios, Inc., 464 U.S. 417 (1984) 0.0... eee eee 7

Weinberger v. Romero-Barcelo,

I cemianeonl 13

FEDERAL CIRCUIT COURT CASES

Airframe Systems, Inc. v. L-3

Communications Corp., 658 F.3d 100 (1st

RB tee a Na Iie in a BO Bes Re Agere 17

Assessment Technologies of WI, LLC. v.

Wire Data, Inc., 361 F.3d 434 (7th Cir.

Bond v. Blum,

a 18

Bridgeport Music, Inc. v. Dimension Films,

410 F.3d 792 (6th Cir. 2005).................cc.sscsceeeees 20

Diamond v. Am-Law Publishing Corp.,

ge El le | Renee 12

Garcia-Goyco v. Law Environmental

Consultants, Inc., 428 F.3d 14 (1st Cir.

SR AE EES ee OP Ree it Se. PO MEET eD 17, 18

Hogan Systems v. Cybresource,

International, Inc., 158 F.3d 319 (5th Cir.

InvesSys, Inc. v. McGraw-Hill Cos., Ltd.,

re ee I I oi cti a srheccierccctinscnictiersnes 17

Lieb v. Topstone Industries, Inc.,

788 F.2d 161 (Sd Cir. 1986) ...................0.000 passim

Matthew Bender & Company, Inc. v.

West Publishing Co., 240 F.3d 116 (2d Cir.

pate RL ys a ERO ci NE DEAE OR ae 11,12

Matthews v. Freedman,

og bo 2 > 5 i Reena ae 17

Riviera Distributors, Inc. v. Jones,

Ee ee et i I iiciivieseriscntcicdoeascisncsescnecn 9

FEDERAL DISTRICT COURT CASES

Baker v. Urban Outfitters, Inc.,

431 F Supp. 2d 351 5 3 & of oe 12

CONSTITUTIONAL PROVISIONS

i NI FI OE, I 5 cs ecretacrmamsinpnonnnbiicenainn 22

FEDERAL STATUTORY AUTHORITIES

WI I sooo seco csectrecsdseencescteretcn es 24

Ear SEITE UTE sin snictsepnigicnonteaiietancanbaigieiebsinesenboedimasnedead 22

a TI eiienicecsnassbaseinishesesenainin ertninithiittseimeibiintaietecadninasin 23

ie Fe ies stccicedcicosietrnivieaspsconessincetornenionpscommatens 23

os a cteicen bash napmuiedebiaiduiertiaanestenen 23

IE wisirisicsprtentncsic pveoeneanieonanoinedsxeconscntuhines 23

Sy I Us siscccssinsssensdirc eden endonisenieciensecpieduslioselie 24

i eR ices csitevcnnstsbenimsioniecestccacnsssiotsitiuns 22

ee I asticinidonsacenesaaunctadcaceietanbiecannaaeioobens passim

at "FLEE Sean O NOSES See ene eaaae 3, 24

OE DSSS TOY San De eee ee, 16

A ee es Ser 20

FEDERAL RULES AND REGULATIONS

ER ge eee rao 16, 20

ADDITIONAL AUTHORITIES

Pierre N. Leval, Toward a Fair Use Standard,

103 Harv. L. Rev. 1105, 1134 (1990)...........000.0... 23

STATEMENT OF INTEREST

The American Intellectual Property Law

Association (“AIPLA”) is a national bar association of

approximately 14,000 members who are primarily

lawyers engaged in private or corporate practice, in

government’ service, and in the = academic

community.! AIPLA members represent a wide and

diverse spectrum of individuals, companies, and

institutions involved directly or indirectly in the

practice of patent, trademark, copyright, trade

secret, and unfair competition law, as well as other

fields of law affecting intellectual property. Our

members represent both owners and users of

intellectual property. Our mission includes helping

establish and maintain fair and effective laws and

policies that stimulate and reward invention and

authorship while balancing the public’s interest in

healthy competition, reasonable costs, and basic

fairness.

1 In accordance with Supreme Court Rule 37.6, amicus curiae

states that this brief was not authored, in whole or in part, by

counsel to a party, and that no monetary contribution to the

preparation or submission of this brief was made by any person

or entity other than the amicus curiae and _ its

counsel. Specifically, after reasonable investigation, AIPLA

believes that (i) no member of its Board or Amicus Committee

who voted to file this brief, or any attorney in the law firm or

corporation of such a member, represents a party to this

litigation in this matter, (ii) no representative of any party to

this litigation participated in the authorship of this brief, and

(iii) no one other than AIPLA, or its members who authored

this brief and their law firms or employers, made a monetary

contribution to the preparation or submission of this brief.

AIPLA has no interest in any party to this

litigation or stake in the outcome of this case, other

than its interest in seeking a correct and consistent

interpretation of the law affecting intellectual

property.

SUMMARY OF ARGUMENT

This case provides the Court with an opportunity

to resolve a split in the circuits on the correct

interpretation and application of the Copyright Act

provision for awarding attorney’s fees. The correct

test for copyright cases, as the Court recently held

for patent cases, is a totality-of-the-circumstances

test that is guided by non-exclusive factors,

including objective reasonableness, frivolousness,

motivation, and the need in particular circumstances

to consider compensation and deterrence. No one

factor, including the objective reasonableness of the

losing party’s position on the merits, should be given

a preclusive effect.

Section 505 of the Copyright Act confers

discretion on the district courts to award reasonable

attorney’s fees to the prevailing party in a copyright

case. In its 1994 decision in Fogerty v. Fantasy, this

Court underscored the broad discretion of the courts

to award attorney’s fees. The Fogerty Court endorsed

a flexible, equitable exercise of judicial discretion on

2 AIPLA sought consent to file this brief from the counsel of

record for all parties, pursuant to Supreme Court Rule 37.3(a).

Counsel for all parties consented and copies of the letters of

general consent have been filed with the Clerk.

a case-by-case basis. Fogerty v. Fantasy, Inc., 510

U.S. 517 (1994). In doing so, this Court expressly

rejected a presumption in favor of a prevailing

presumption that, under Section 505, fees would be

awarded to the prevailing party in all but unusual

circumstances.

Footnote 19 of the Fogerty decision referenced

the Third Circuit’s use of a set of “non-exclusive”

factors that “may be used to guide courts’ discretion

as long as such factors are faithful to the purposes of

the Copyright Act and are applied evenhandedly to

prevailing plaintiffs and defendants.” Jd. at 534 n.19.

The non-exclusive factors include “frivolousness,

motivation, objective unreasonableness (both in the

factual and in the legal components of the case) and

the need in particular circumstances to advance

considerations of compensation and deterrence.” /d.

In 2005, a unanimous decision of this Court on

the issue of attorney's fee awards under 28 U.S.C.

§ 1447(c) noted, again in a footnote, that the Fogerty

Court “did not identify a standard under which fees

should be awarded” but “remanded to the Court of

Appeals to consider the appropriate test in the first

instance.” Martin v. Franklin Capital Corp., 546 U.S.

132, 141 n* (2005). In the twenty-one years since the

Fogerty decision, the regional circuits have

developed various formulations of the non-exclusive

factors, some of which involve weighted factors or

presumptions that take away the discretion

expressly conferred upon the district courts by

Congress, contrary to the plain language of Section

505 and the holding of this Court in Fogerty.

This brief is submitted by AIPLA to urge the

Court to provide needed direction on the appropriate

standard for awarding fees under Section 505.

Consistent with this Court’s fee-shifting decisions,

including Octane Fitness, LLC v. ICON Health &

Fitness, Inc., 134 S. Ct. 1749 (2014), the recent

decision involving the fee-shifting provision of the

Patent Act, this Court should endorse the use of a

totality-of-the-circumstances test that is guided by

non-exclusive factors, including objective

reasonableness, frivolousness, motivation, and the

need in particular circumstances to consider

compensation and deterrence. AIPLA also urges this

Court to admonish the regional circuits that “precise

rulels}) or formulale) for making these

determinations” are contrary to Section 505.

Section 505 empowers district courts to

determine when, under the totality of the

circumstances, equity and fairness dictate that fees

should be recovered by the prevailing party. Section

505 does not establish any presumption that fees

must be awarded to the prevailing party. Moreover,

as this Court has aptly noted, the purposes of the

reflecting numerous’ policy choices about

compensation and deterrence in specific contexts. As

a result, it is dangerous to develop shorthand rules

or presumptions that constrain a district court's

discretion. The district courts should be free to bring

their experience, perspective, and hands-on

knowledge of the case to their analysis of the totality

of the circumstances, mindful that their ultimate

equitable determination must be consistent with the

purposes of the Copyright Act.

ARGUMENT

I. Section 505 of the Copyright Act Confers Broad

Discretion on the District Court to Award

Attorney’s Fees.

Section 505 of the Copyright Act authorizes a

district court to exercise its broad, equitable

discretion to award attorney’s fees in copyright

litigation. It provides that:

liln any civil action under this title, the

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.

Except as otherwise provided by this title,

the court may also award a _ reasonable

attorney’s fee to the prevailing party as part

of the costs.

17 U.S.C. § 505.

This Court has addressed the question of the

appropriate standard for awarding attorney's fees

under Section 505 of the Copyright Act. It expressly

held that “[tlhe word ‘may’ clearly connotes

discretion” to award attorney's fees under Section

505, emphasizing that “[t)here is no precise rule or

formula for making these determinations.” Fogerty

v. Fantasy, Inc., 510 U.S. 517, 533, 534 (1994)

(quoting Hensley v. Eckerhart, 461 U.S. 424, 436-

437 (1983)). Accordingly, this Court instructed that

“equitable discretion should be exercised” upon

consideration of case-specific factors, consistent with

the purposes of the Copyright Act. /d. at 534.

The Fogerty case addressed a circuit split on this

issue. Some circuits had been applying a “dual

standard” under which prevailing copyright holders

were awarded fees as a matter of course while

successful defendants were required to show that the

suit was frivolous or brought in bad faith. Other

circuits applied an “even-handed” approach, which

did not impose a greater burden on prevailing

defendants than on prevailing plaintiffs. 510 U.S. at

517 After considering the statutory text, the

purposes of the Copyright Act, and the legislative

history of Section 505, this Court held that, in

enacting Section 505, Congress did not establish a

standard of treating prevailing copyright holders

and accused infringers differently for purposes of fee

awards. /d. at 521-22. Likewise, the Court rejected

Fogerty’s argument that Section 505 evidences

Congress’ intent to adopt the British Rule, under

which attorney’s fees are awarded to the prevailing

party absent unusual _ circumstances. “The

automatic awarding of attorneys fees to the

prevailing party would pretermit the exercise of [the]

discretion” conferred by Congress upon district

courts. /d. at 533.

The Fogerty decision rejected rigid rules and

uneven standards as inappropriate in evaluating fee

petitions in copyright cases. Instead of any “precise

rule or formula for making these determinations,”

the Court suggested, without deciding, that district

courts evaluating attorney’s fee petitions could look

to “several nonexclusive factors to guide [their]

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 considerations

of compensation and deterrence.” /d. at 534 and n.19

(quoting Hensley v. Eckerhart, 461 U.S. 424, 436-37

(1983) and Lieb v. Topstone Industries, Inc., 788

F.2d 151, 156 (3d Cir. 1986)); see Martin, 546 U.S. at

141 n*

In footnote 19 of its decision, this Court further

explained the discretionary approach to be applied in

considered must be “faithful to the purpose of the

and defendants in an evenhanded manner.” 510 U.S.

at 534 n.19 (emphasis added). Importantly, the

Court rejected the argument that Section 505

evidences an exclusive purpose to “encouragel |

litigation of meritorious claims of copyright

infringement.” /d. at 525-26. Calling this view of the

purposes of the Copyright Act “flawed” and “one-

sided,” the Court admonished that:

the policies served by the Copyright Act

are more complex, more measured, than

simply maximizing the number of

meritorious suits for copyright

infringement. We have often

recognized that the monopoly privileges

that Congress has authorized, while

‘intended to motivate the creative activity

of authors and inventors by the provision

of a special reward,’ are limited in nature

and must ultimately serve the public good.

Id. at 526, quoting Sony Corp. of America v.

Universal City Studios, Inc., 464 U.S. 417, 429

(1984). Accordingly, “l{blecause copyright law

ultimately serves the purpose of enriching the

general public through access to creative works, it is

peculiarly important that the boundaries of

and therefore, “a successful defense of a copyright

infringement action may further the policies of the

prosecution of an infringement claim by the holder of

a copyright.” Jd. at 527

This Court’s analysis in Fogerty confirms that an

award of fees should be left to the district court’s

equitable discretion, may be informed by

consideration of a variety of factors, and should be

exercised consistently with the goals of the

may be informed by the relative merits of the

parties’ litigation positions and conduct, there is no

room under Section 505’s discretionary standard for

any rigid rules or any “thumb on the scale” for or

against a particular party or outcome. The Fogerty

decision confirms that district courts must consider

the totality of the circumstances in the particular

case before them, while ensuring that any decision to

award or deny fees is consistent with the purposes of

the Copyright Act.

II. This Court’s Guidance is Needed to Address the

Regional Circuits’ Inconsistent Approaches.

A. A Presumption in Favor of Fee Awards Is

Inconsistent with Se-tion 505.

Despite the express language of Section 505, this

Court’s emphasis on the discretionary nature of an

attorney’s fees award under Section 505, and its

explicit rejection of petitioner Fogerty’s argument

that attorney’s fees should be awarded to the

prevailing party absent unusual circumstances,

some regional circuits have _ established a

presumption that fees should be granted to the

prevailing party in a copyright suit. See Riviera

Distribs., Inc. v. Jones, 517 F.3d 926, 928 (7th Cir.

2008) (“Since Fogerty we have held that the

prevailing party in_ copyright litigation is

presumptively entitled to reimbursement of its

attorneys’ fees.”); Hogan Sys. v. Cybresource, Int'l,

Inc., 158 F.3d 319, 325 (5t» Cir. 1998) (“although

attorney's fees are awarded in the trial court’s

discretion, they are the rule rather than the

exception and should be awarded routinely”).

Such presumptions defy the plain language of

Section 505, which expressly grants discretion to

district courts. As this Court noted in Fogerty, “the

automatic awarding of attorneys fees would

pretermit the exercise of that discretion.” As this

Court noted in Fogerty, “the automatic awarding of

attorney’s fees would pretermit the exercise of that

discretion.” Fogerty, 510 U.S. at 533. Had Congress

intended to create a presumption in favor of fee

awards, it would have done so. /d. at 517. (“We find

it impossible to believe that Congress, without more,

intended to adopt the British Rule. Such a bold

departure from traditional practice would have

surely drawn more explicit statutory language and

legislative comment.”); Martin, 546 U.S. at 137

(finding “no sound basis” for a presumption in favor

of awarding fees in the absence of more explicit

statutory language and legislative comment).

Congress did not create any presumption of fee-

shifting in copyright cases—the plain language of

Section 505 evidences Congress’ intent to leave the

award of fees to the court’s discretion.

This Court has repeatedly emphasized that

equitable discretion requires the ability to examine

the totality of the circumstances without the

imposition of categorical rules or presumptions. See,

e.g., eBay Inc. v. MercExchange, L.L.C., 547 U.S.

388, 393 (2006); New York Times Co. v. Tasini, 533

U.S. 483, 505 (2001). In eBay Inc., this Court

expressly rejected the Federal Circuit’s formulation

of a “general rule” in a patent infringement case that

“a permanent injunction will issue once infringement

and validity have been adjudged.” Jd. at 393-394.

The Federal Circuit’s rule instructed district courts

to deny an injunction only in the “unusual” case

involving “exceptional circumstances” and “in rare

instances to protect the public interest.” /d. at

394. In rejecting the Federal Circuit’s categorical

rule on the grant of injunctions in patent cases, this

Court reasoned that such categorical rules “cannot

be squared with the principles of equity adopted by

Congress,” noting that its decision was “consistent

with [its] treatment of injunctions under the

Co. v. Tasini, 533 U.S. 483, 505 (2001) (emphasizing

the word “may” in pointing out that an injunction

need not necessarily follow from an infringement

finding) and Campbell v. Acuff-Rose Music, Inc., 510

U.S. 569, 578 n.10 (1994) (emphasizing the word

“may” and noting that “the goals of the copyright law

are not always best served by automatically

granting injunctive relief”’)).

For these reasons, the presumptions employed

by some of the regional circuits, including the

Seventh and Fifth Circuits, clearly contradict the

plain meaning of Section 505 and Fogertys holding

that fee awards be granted “only as a matter of the

court’s discretion.” 510 U.S. at 534 (emphasis added).

B. The Use of Weighted Factors Is Inconsistent

with Section 505.

The Second Circuit’s formulation of the multi-

factor analysis suggested by the Fogerty Court

emphasizes the particular importance of the

objective unreasonableness factor at the risk of

directing, rather than guiding, the district court’s

analysis. In Matthew Bender & Company, Inc. v.

West Publishing Co., 240 F.3d 116 (2d Cir. 2001), the

Second Circuit reviewed a fee award in the wake of

Fogerty and held that “objective reasonableness is a

factor that should be given substantial weight in

determining whether an award of attorneys’ fees is

warranted.” /d. at 122.

As a result, “a number of courts in [the Second]

[Clircuit have awarded attorneys’ fees to prevailing

defendants solely upon a showing that the plaintiffs

position was objectively unreasonable, without

regard to any other ‘equitable factor.” Baker v.

Urban Outfitters, Inc., 431 F. Supp. 2d 351, 357

(S.D.N.Y. 2006).3 This is unsurprising in light of the

Matthew Bender court’s reliance on a pre- Fogerty

Second Circuit case for the proposition that the

“principle [sic] purpose of the [Copyright Act] is to

encourage the origination of creative works by

attaching enforceable property rights to them.” 240

F.3d at 122, (quoting Diamond v. Am-Law Publ’g

Corp., 745 F.2d 142, 147 (2d Cir. 1984)). This

reasoning encourages the “one-sided” view of the

“flawed” because it failed to recognize that

“copyright law ultimately serves the purpose of

enriching the general public through access to

creative works.” 510 U.S. at 525-27.

The Second Circuit’s rule that “substantial

weight” be placed on the objective unreasonableness,

vel non, of the losing party’s position downplays the

potential relevance of other factors that could

support fee awards. By mandating that one of at

least several non-exclusive factors should receive

“substantial weight,” the Second Circuit’s

formulation has, in effect, created a categorical rule,

making it more difficult for a prevailing party to

3 Although the Matthew Bender court acknowledged that a

finding of objective reasonableness did not “necessarily

preclude[ ] the award of fees,” 240 F.3d at 122 (emphasis

added), the “substantial weight” on that factor, as required by

the Second Circuit, risks removing discretion from the district

courts.

obtain fee awards against opponents who hold

objectively reasonable factual and legal positions.

This Court has warned against imposing

categorical rules that impinge upon a district court’s

exercise of equitable discretion. “The essence of

equity jurisdiction has been the power to mould

each decree to the necessities of the particular case.

Flexibility rather than rigidity has distinguished it.”

Weinberger v. Romero-Barcelo, 456 U.S. 305, 312

(1982) (quoting Hecht Co. v. Bowles, 321 U.S. 321,

329 (1944)); see also Holmberg v. Ambrecht, 327 U.S.

392, 396 (1946) (“Equity eschews mechanical rules;

it depends on flexibility.”). In eBay Inc., this Court

not only rejected the Federal Circuit's presumption

in favor of injunctions in patent cases, the Court

rejected the district court’s apparent rule that a

“plaintiffs willingness to license its patents’ and ‘its

lack of commercial activity in practicing the patents’

would be sufficient to establish that the patent

holder would not suffer irreparable harm if an

injunction did not issue.” Jd. at 390. This Court

warned that “traditional equitable principles do not

permit such broad classifications” and required the

district court to engage in a flexible analysis

considering the totality of the circumstances of the

parties inthe case. /d. at 392.

Likewise, this Court has noted that “in the

comparable context of the [Patent] Act,” the

imposition of rigid formulae on what should be a

case-by-case, totality-of-the-circumstances inquiry is

improperly restrictive of district courts’ exercise of

discretion with respect to attorney’s fees. Octane

Fitness, 134 S. Ct. at 1756. Given that the statutory

text of the copyright fee provision lacks even the one

constraint dictated by the Patent Act—that fees

should be awarded in “exceptional” cases—the

prescription of rules or formulae for the fee analysis

in the copynght context is even more inappropriate.

In sum, the Second Circuit's formulation of the

totality-of-the-circumstances analysis under Section

505, mandating that one non-exclusive factor to

consider should be accorded “substantial weight,”

cannot be squared with Congress’ intent to confer

equitable discretion upon the courts. See eBay Inc.,

547 U.S. at 393 (imposing categorical rules on the

decision to grant an injunction “cannot be squared

with the principles of equity adopted by Congress”).

Ill. Section 505 Requires a _ Totality-of-the-

Circumstances Analysis.

In place of rigid rules, presumptions, or weighted

standards, district courts should exercise the

equitable discretion conferred by Section 505 on a

case-by-case basis, in a manner that is consistent

with the purposes of the Copyright Act. In a footnote

of its Fogerty decision, this Court referenced a “non-

exclusive” list of factors outlined in the Third Circuit

case of Lieb v. Topstone Industries, Inc., namely,

“frivolousness, motivation, objective

unreasonableness (both in the factual and in the

legal components of the case) and the need in

particular circumstances to advance considerations

of compensation and deterrence.” 788 F.2d 151, 156

(3d Cir. 1986). As the Third Circuit explained in

setting out its list of non-exclusive factors, “[wle

expressly do not limit the factors to those we have

mentioned, realizing that others may present

themselves in specific situations. Moreover, we may

not usurp that broad area which Congress has

reserved for the district judge.” /d. at 156. This

Court noted that “such factors may be used to guide

courts’ discretion, so long as such factors 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.

Because the regional circuits have varied in their

formulation and analysis of these non-exclusive

factors in their review of discretionary fee awards

under Section 505, this Court should offer additional

guidance, consistent with its other pronouncements

on the exercise of equitable discretion, including

most recently in its Octane Fitness decision. In

particular, the Court should reaffirm the equitable

discretion of the district courts to conduct a totality-

of-the-circumstances analysis—guided by the non-

exclusive factors identified in Lieb, as well as others

that may present themselves in a specific case—and

reiterate that the totality-of-the-circumstances test

must be mindful of the complex purposes of the

1756 n.6 (favorably noting that, in Fogerty, the

Court explained that district courts could consider

the non-exclusive Lieb factors).

A. The District Court May Consider the

Strength of the Losing Party’s Position.

The strength of the losing party’s position on the

merits is an appropriate factor to consider in a

Section 505 fee award analysis. However, a rule that

essentially requires “objective unreasonableness” or

“frivolousness” to support a fee award threatens to

render Section 505 superfluous. As this Court has

noted on several occasions, see, e.g., Octane Fitness,

134 S. Ct. at 1758, statutory fee-shifting provisions

must not be construed such that they are merely

> sé:

coextensive with courts’ “inherent power” under

the common law to award fees to a prevailing party

when the losing party has “acted in bad faith,

vexatiously, wantonly, or for oppressive reasons.” Jd.

quoting Alyeska Pipeline Service Co. v. Wilderness

Society, 421 U.S. 240, 258-59 (1975)).

The intent of Congress in enacting Section 505

was to displace the absolute application of the

American Rule and expand the district courts’

exercise of equitable discretion to award of attorney’s

fees in copyright cases beyond the discretion they

already had to award fees for bad faith and

vexatious litigation. See Cooter & Gell v. Hartmax

Corp., 496 U.S. 384, 392-93 (1990); see also

Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991)

(“[A] court may assess attorney’s fees when a party

has acted in bad faith, vexatiously, wantonly, or for

oppressive reasons.” (internal quotation marks

omitted)); 28 U.S.C. § 1927 (any attorney who

multiplies proceedings unreasonably and vexatiously

may be required by the court to satisfy personally

the excess costs, expenses, and attorney’s fees); Fed.

R. Civ. P 11. Because a frivolous or objectively

unreasonable litigation position could serve as

grounds for a fee award under Rule 11 and the

court’s inherent power, Section 505 must allow

courts to consider whether fees are warranted in

instances where palpably weak, but not utterly

baseless, claims or defenses are asserted.

Courts in the First Circuit have articulated a

formulation for assessing the strength of the losing

party's position that captures this less stringent

standard. Instead of asking whether’ the

unsuccessful party’s claim or defense is “frivolous” or

“objectively unreasonable,” the inquiry is whether

the party’s claim is “objectively quite weak.” See

InvesSys, Inc. v. McGraw-Hill Cos., Ltd., 369 F.3d

16, 21 (1st Cir. 2004) (considering “dubious” nature

of plaintiffs ownership claim); Garcia-Goyco v. Law

Envtil. Consultants, Inc., 428 F.3d 14, 21 (ist Cir.

2005) (discussing “objectively weak” standard).

Importantly, the “objectively weak” factor may

permit the award of fees but does not require it. See

Airframe Sys., Inc. v. L-3 Comm’ns Corp., 658 F.3d

100, 108-09 (1st Cir. 2011) (affirming denial of fees

to prevailing defendant despite failure of proof on

essential elements of claim). Conversely, as the First

Circuit has also explained, “[dlepending on other

circumstances, a district court could conclude that

the losing party should pay even if all of the

arguments it made were reasonable.” See Matthews

v. Freedman, 157 F.3d 25, 29 (1st Cir. 1998). The

“objectively weak” inquiry provides a useful lens

through which district courts can view the losing

party’s position on the merits.

B. The District Court May Consider a Party's

Motivation.

A party's motivation and conduct may be

considered in the district court’s fee analysis under

Section 505. See Lieb, 788 F.2d at 156. Here again,

as the court in Lieb recognized, the court may

consider a litigant’s conduct even if it has not

engaged in highly culpable conduct such as litigation

brought in bad faith, willful infringement, or like

misconduct. See id. at 156 (“we do not require bad

faith” as a prerequisite for the award of counsel fees

under the Copyright Act).

Improper motivation can take many forms,

underscoring the need for a flexible totality-of-the-

circumstances analysis. For example, in Bond v.

Blum, 317 F.3d 385, 397-98 (4th Cir. 2003), the court

considered the motivation of a stepfather who was

using copyright law to try to block evidence from

appearing in a child custody suit. “The [district]

court stated that Bond misused the Copyright Act

and that he was motivated by a desire to suppress

the underlying facts of his copyrighted work rather

than to safeguard its creative expression.” /d. The

use of a weak copyright claim to “bootstrap a state

law contract action into federal court” likewise may

evidence improper motivation. See, e.g., Garcia-

Goyco, 428 F.3d at 21 (affirming district court's

award of fees without reaching the issue of copyright

misuse because district court could properly find

that the claim was lacking in merit).

There is also the potential for a litigant to use

the specter of expensive, lengthy litigation as

leverage to force an opposing party to settle. For

example, in Assessment Techs. the _ court

highlighted a form of copyright misuse that occurs

when a company seeks to gain an advantage over a

competitor by asserting rights outside the scope of

2004) (holding that “[flor a copyright owner to use an

infringement suit to obtain property protection, here

in data, that copyright law clearly does not confer,

hoping to force a settlement or even achieve an

outright victory over an opponent that may lack the

resources or the legal sophistication to resist

effectively” could be a form of copyright misuse). The

prospect of fees can prompt parties to “stop and

think” before surrendering meritorious positions, or

wielding the expense of litigation for improper

purposes. Accordingly, a party's motivation may be

considered in a district court’s fee analysis.

C. “Considerations of Compensation and

Deterrence” Include Litigation Misconduct.

Fee shifting is a tool for district courts to control

the conduct of the parties, to sanction litigation

misconduct, or to shift the risks and burdens of

particular litigation tactics in order to encourage or

discourage certain types of behavior. See, e.g.

Octane Fitness, 134 S. Ct. 1749; Fogerty, 510 U.S. at

522-25; Cooter & Gell v. Hartmarx Corp., 496 U.S.

384, 393 (1990). Consistent with this Court's

decision in Octane Fitness, a court may also consider

litigation conduct in_ connection with its

compensation and deterrence analysis. See Octane

Fitness, 134 S. Ct. at 1756 (courts may consider “the

unreasonable manner in which the case was

litigated”). In Bridgeport Music, Inc. v. Dimension

Films, 410 F.3d 792, 809 (6th Cir. 2005), for

instance, the Sixth Circuit found that “conduct that

complicated rather than streamlined the issues and

contributed to the multiplication of fees for the

defendant” supported the issuance of a fee award for

purposes of “compensation and deterrence.” In that

case, plaintiffs had inundated the court with

paperwork that was “hastily prepared and often

lackling] in sufficient factual or legal support.” /d.

Importantly, litigation misconduct need not rise

to the level of vexatious conduct that violates Rule

11 in order to be relevant for a fee analysis under

Section 505. See Octane, 134 S. Ct. at 1757 (court

may award fees under Section 285 of the Patent Act

for unreasonable conduct that is “not necessarily

independently sanctionable”). The inquiry should be

whether a party unjustly imposed costs on its

adversary in excess of those warranted by the

strength of its claims or defenses, in light of all of the

relevant circumstances. See generally Precision

Instrument Mfg. Co. v. Automotive Maintenance

Machine Co., 324 U.S. 806, 814 (1945) (“he who

comes into equity must come with clean hands”).

This flexibility in the awarding of fees provides the

district court with an important case management

tool to help deter overly aggressive litigation tactics

by both plaintiffs and defendants, whether

prevailing or non-prevailing.

D. The District Court Should Consider the

Purposes of the Copyright Act as a “Check”

on Its Discretion.

The Fogerty Court emphasized that the factors

that district courts might use to “guide [their]

discretion” must be “faithful to the purposes of the

Section 505 inquiry must take into account the

totality of the circumstances, courts cannot make fee

determinations by simply “checking the boxes” of the

Lieb factors (or any other factors). It is not the case

that any one factor is required to justify a fee award,

nor is it the case that any of the factors, if found,

invariably necessitates a fee award. This means

that, in some circumstances, fees might be

appropriate, and consistent with the purposes of the

been frivolous, objectively unreasonable, or

improperly motivated. At the same time, any

combination of factors might not be sufficient if a fee

award would be inconsistent with the purposes of

the Copyright Act. As this Court emphasized in

Fogerty, “there is no precise rule or formula for

making these determinations,” but instead equitable

discretion should be exercised. Jd. at 534 (quoting

Hensleyv. Eckerhart, 461 U.S. 424, 436-437 (1983)).

Ultimately, the “purposes of the Copyright Act”

serve as a “check” on a court’s discretionary fee

determination based on consideration of the relevant

factors. Consistent with this Court’s decision in

Indep. Fed'’n of Flight Attendants v. Zipes, 491 U.S.

754, 759 (1989), there are “limits ‘in the large

objectives’ of the relevant Act which embrace certain

‘equitable considerations.” As this Court pointed out

in Fogerty, “the policies served by the Copyright Act

are more complex, more measured, than simply

maximizing the number of meritorious suits for

Indeed, many different policy judgments can be

gleaned from various provisions of the Copyright

Act. Some are broadly applicable—for example, the

availability of increased statutory damages against

willful infringers and reduced statutory damages

against innocent infringers suggests a policy of

deterring willful infringement and not unduly

punishing innocent infringement. 17 U.S.C.

§ 504(c)(2). This policy might well inform a court's

decision regarding whether to award fees to a

successful plaintiff in a case in which the defendant

has been shown to have infringed innocently.

Similarly, the codification of the judicially created

fair use doctrine at 17 U.S.C. § 107 reflects Congress’

general concern that the monopoly created by

hinders “the progress of science and useful arts.”

U.S. Const., Art. I, § 8, cl. 8. With the enactment of

§ 107, Congress confirmed that “the monopoly

privileges [it] authorized are limited in nature

and must ultimately serve the public good.” Fogerty,

510 U.S. at 526. As a result, a court evaluating a

prevailing plaintiffs fee petition in a case involving a

strong, but ultimately unsuccessful, fair use defense

asserted in good faith might reasonably consider the

policies underlying Congress’ adoption of fair use in

deciding whether to award fees as part of its

equitable analysis in that case.

Other policy judgments are more specific—for

example, the various limitations on the exclusive

rights of copyright holders embodied in the statute

suggest that Congress intended to provide special

protection or encouragement for certain categories of

users or uses, including nonprofit educational

institutions (17 U.S.C. § 110(1)), libraries and

archives (17 U.S.C. § 108), religious congregations

(17 U.S.C. § 110(3)), and the visually impaired (17

U.S.C. § 121). Courts may in _ appropriate

circumstances consider the policies underlying these

limitations in a fee-award analysis.

Indeed, in the _ discretionary context of

injunctions, this Court has recognized that the

policies embodied in the Copyright Act’s substantive

protections for certain uses of copyrighted works

may be relevant to a court’s determination of the

appropriate relief when a defendant is found to have

exceeded the scope of those protected uses. For

example, in Campbell v. Acuff-Rose Music, Inc., the

Court explained:

Because the fair use enquiry often

requires close questions of judgment as to

the extent of permissible borrowing in

cases involving parodies (or other critical

works), courts may also wish to bear in

mind that the goals of the copyright law,

“to stimulate the creation and publication

of edifying matter,” [Leval, Toward a Fair

Use Standard, 103 Harv. L. Rev. 1105,

1134 (1990)] are not always best served by

automatically granting injunctive relief

when parodists are found to have gone

beyond the bounds of fair use. See /7

U.S.C. § 502(a) (court “may grant

injunctions on such terms as it may deem

reasonable to prevent or _ restrain

infringement”).

510 U.S. 569, 578 n.10 (1994). As noted above,

similar policy considerations, including concern for

protecting parody, criticism, and the public domain,

may in appropriate cases support an award of fees to

an accused infringer that has been found not to have

exceeded the bounds of fair use, for example.

Moreover, the Copyright Act applies to, and

attempts to address issues presented by, a vast

array of disparate works and products, from books

and paintings to motion pictures, computer

operating systems, architectural works, and software

embedded in consumer products. 17 U.S.C. § 101. As

this Court has recognized, the complexity of the

difficult to craft broadly applicable rules to govern

fee awards. Instead, a district court must evaluate

the various equitable factors that present

themselves in a specific case to assess whether a fee

award is appropriate; in doing so, the court must

also ensure that its determination is consistent with

the various policy judgments Congress has expressed

through the text and legislative history of the

4 The complexity of purposes embodied in the Copyright Act

distinguishes Section 505 from 28 U.S.C. § 1447(c), at issue in

Martin. In that case, this Court determined that “the standard

CONCLUSION

With its enactment of Section 505 of the

judges the discretion to award fees to prevailing

parties in copyright cases. Consistent with the long-

standing tradition of equitable discretion, this Court

has emphasized that “[t]here is no precise rule or

formula for making [fee award) determinations.”

Fogerty, 510 U.S. at 534 (citation omitted). Rather,

the decision must rest with the district courts’

equitable discretion precisely because—as

demonstrated by the approaches adopted by the

Second, Fifth, and Seventh Circuits—it is difficult to

fashion or apply rigid rules and tests evenhandedly,

without usurping the power that Congress reserved

for the district courts.

This Court should reaffirm the district courts’

discretion in awarding fees to ensure that they have

room to craft remedies that are not only appropriate

to the circumstances of each case but also consistent

with the overarching public-interest goals of

circumstances analysis of the facts and equities, this

for awarding fees should turn on the reasonableness of the

removal!” in light of “the desire to deter removals sought for the

purpose of prolonging litigation and imposing costs on the

opposing party, while not undermining Congress’ basic decision

to afford defendants a right to remove as a general matter,

when the statutory criteria are satisfied.” 546 U.S. 132, 140-41

(2005). In light of the significantly more complex policies served

by the Copyright Act, such a simple formulation of the

standard for fees is inappropriate here.

Court should endorse consideration of non-exclusive

factors, including objective reasonableness,

frivolousness, motivation, and the need in particular

circumstances to consider compensation and

deterrence, mindful of the complex and measured