US Supreme Court Sets Guidelines of ‘Objective Reasonableness’ for Awarding Attorneys’ Fees in Copyright Infringement Cases

On June 16, 2016 in a unanimous decision, the US Supreme Court in Kirtsaeng v John Wiley & Sons held that lower courts must take into account all the circumstances of a case in their own terms when awarding attorneys’ fees. Section 505 of the US Copyright Act states that a district court may “award a reasonable attorney’s fee to the prevailing party”, without specifying appropriate standards. Furthermore, judges must give significant, but not controlling, weight to the objective reasonableness of the losing party’s position when making decisions.

The Court further restated the principles established in its earlier Fogerty v Fantasy, Inc decision with regard to judge’s discretion in fee-shifting decisions:

1. the assessment must be made in a case-by-case basis;
2. the prevailing party must not be treated differently; and
3. other non-exclusive factors include frivolousness, motivation, objective unreasonableness and the need to advance considerations of compensation and deterrence.

In this case, the plaintiff alleged that the defendant imported and sold foreign-made textbooks in the U.S, thereby violating plaintiff’s exclusive distribution rights. The Court held for the defendant, stating that the Act’s first-sale doctrine applies to both foreign-made and domestic books. Nonetheless, the Court denied defendant’s application to recover legal costs and sent the matter for District Court’s review. The Court reasoned that awarding attorney’s fees against a losing party, which took a reasonable position in the course of litigation, would not serve the Act’s purpose of advancing public’s access to creative work or encouraging copyright litigation.

Summary by: Anna Troshchynsky