Supreme Court Revives Dispute over Legal Fees in Copyright Case

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The Supreme Court is giving a Thai student who won a 2013 copyright case another chance to persuade a lower court that he is entitled to attorney’s fees. Usually in civil litigation, each side pays their own legal fees.  But the Copyright Act allows judges to “award a reasonable attorney’s fee to the prevailing party.”

Federal appeals courts have applied different standards in deciding when fee awards in copyright cases are warranted. The New York judge in Supap Kirtsaeng’s case awarded the student nothing, relying on a decision from the federal appeals court there that focused on whether the losing side’s position had been “objectively reasonable.” The judge said the publisher easily met that standard as it had won a $600,000 judgment against the student, won an appeal in 2011, and lost in the Supreme Court by a 6-to-3 vote in 2013.

Justice Elena Kagan, writing for the court, said whether the losing side’s position was objectively reasonable should play a major role in the analysis, but other considerations such as motivation, deterrence, and compensation must also play a role in the analysis. Still, she appeared to suggest that the student was unlikely to prevail under the correct standard  Kagan wrote, “We do not at all intimate” that the lower courts “should reach a different conclusion than it already has.”

This was Kirtsaeng’s second trip to the Supreme Court. His 2013 case clarified an ambiguous phrase in the Copyright Act which said imported copyrighted goods were subject to the same rules as goods bought in the United States: Owners of particular copies can do what they like with them.  The justices ruled that the first-sale doctrine allowed a US university student to buy textbooks overseas and resell them on eBay while undercutting textbook publisher John Wiley & Sons.

In the new case, Mr. Kirtsaeng sought more than $2 million in legal fees from the publisher that had sued him. He had argued that courts should give special consideration to whether the lawsuit in question had helped clarify a difficult and important legal issue. He claimed awarding legal fees to the winning side would encourage such cases to be litigated. But the court disagreed with his approach.  Justice Kagan said “Kirtsaeng’s proposal would not produce any sure benefits.” “Fee awards are a double-edged sword: They increase the reward for a victory — but also enhance the penalty for a defeat.”

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