Prevailing Party Did Not Prevail Enough for Attorney’s Fee Award

Yellow Pages Photos sued Ziplocal and Yellow Pages Group for copyright infringement.  The jury found that Ziplocal willfully infringed 123 copyrights owned by Yellow Pages Photos.  The jury awarded Yellow Pages Photos $123,000 in statutory damages against Yellow Pages Group for willful infringement, $1 in actual damages against Ziplocal, $0 in statutory damages against Ziplocal and $100,000 in actual damages for Ziplocal’s contributory willful infringement.  The total jury award against Ziplocal was $100,001.  Yellow Pages Photos brought a post trial motion against Ziplocal for attorney’s fees and costs. 

The Copyright Act provides in 17 U.S.C. §505 that “the court in its discretion may allow the recovery of full costs by or against any party.”  Under §505, “the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.”  The district court refused to award attorney’s fees under the Copyright Act.

An award of fees to either side would run afoul of any perceived even-handed approach. The jury’s verdict speaks for itself that Ziplocal committed both willful infringement and willful contributory infringement. Nevertheless, the jury did not award a great amount of damages. While the Plaintiff vigorously and successfully defended its copyright, the damages sought based on the number of works at 10,200 far exceeded those actually recovered for the less than 200 works. The disconnect between the damages sought and the damages awarded weigh heavily against an award of fees. The Court exercises its discretion to deny attorney’s fees under the Copyright Act in this very contentious case.

The district court did award Yellow Pages Photos attorney’s fees and costs against Ziplocal for breaching Yellow Pages Photo’s End User License Agreement (EULA).  Florida state law applied to the EULA breach and the district court did not have discretion under state law to deny the fee award.  The jury awarded $0 to Yellow Pages Photo’s for Ziplocal’s breach of the EULA.

This case is Yellow Pages Photos, Inc. v. Ziplocal, LP, No. 8:12-cv-755-T-26TBM, U.S. District Court, Middle District of Florida.

No Copyright Infringement for Photos Registered After Suit Filed

Louis Psihoyos is a professional photographer.  John Wiley & Sons, Inc. is a textbook publisher.  Wiley discovered that it published some of Psihoyos’ photos in its textbooks without a license from Psihoyos.  Wiley requested licenses from Psihoyos after the fact.  Psihoyos sued Wiley for infringing the copyrights on eight photos.  Although Psihoyos won the case overall, some of the photos he alleged were infringed were excluded from consideration by the jury.

This case emphasizes the importance of making sure that the infringed works are registered before the complaint is filed, making sure that the infringed works identified in the complaint are the works that were actually infringed and making sure that the registration certificates provided to the court by the copyright owner are for the works that were actually infringed.

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WWE Event Copyright Infringement Damages Claims Smacked Down

This case illustrates the difficulty in proving actual damages and profits damages in copyright infringement cases.  Anthony Lawrence Dash composed “Tony Gunz Beat,” (TGB), an instrumental music track.  Floyd Mayweather, a famous boxer, co-wrote lyrics to TGB and renamed the song “Yep.”  Mayweather used “Yep” as his introductory music for two World Wrestling Entertainment, Inc. (WWE) broadcast events he appeared in.  Dash sued Mayweather, WWE and others for copyright infringement.

As Dash did not register his copyright until after the alleged infringement occurred, he could not recover statutory damages and was limited to proving his actual damages and the infringers’ profits.  The parties requested the district court to rule on whether Dash was entitled to damages before determining whether the defendants were liable for copyright infringement.  The defendants moved for summary judgment on both damages issues.  The district court ruled that Dash was not entitled to receive either actual damages or profits damages.  Dash did not present evidence that TGB had a market value, precluding actual damages.  Dash did not present evidence of a causal link between the playing of his song and an increase in profits received by the defendants, preventing profits damages.  The district court then dismissed the case entirely, including the liability portion of the case.  The Fourth Circuit Court of Appeals affirmed the district court’s decision. 

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Maximum Statutory Damages for Willful Copyright Infringement a Jury Issue

Chara Curtis, Cynthia Aldrich, and Alfred Currier wrote and illustrated three children’s books, How Far to Heaven?, Fun Is a Feeling and All I See is a Part of Me.  The copyrights on the books are registered.  Illumination Arts, Inc. (IAI) published the books under a publishing contract, beginning in 1989.  IAI paid royalties until September 30, 2009.  After that IAI stopped paying regular royalties, making only one subsequent royalty payment.  The authors demanded that IAI resume paying royalties.  When IAI still failed to pay royalties, the authors terminated the publishing contracts with IAI and requested to buy the books in inventory.  IAI refused to sell the inventory books to the authors.  Prior to the authors’ contract termination, IAI made the books available to consumers in electronic form, even though it was not authorized to do so under the publishing agreements.  IAI continued to make copies of the books, sell the books and display them online after the authors terminated the publishing contract, despite the authors’ demands to cease such activities.

The authors filed a lawsuit against IAI and its successor, Illumination Arts Publishing, LLC (IAP) in federal court in the Western District of Washington.  The authors alleged breach of contract and copyright infringement and sought an injunction against IAI and IAP.  This post addresses only the copyright issues.  In the authors’ first motion for summary judgment, the district court held IAI, IAP and two of their officers directly liable for copyright infringement and for willful copyright infringement.  The district court granted the authors’ motion for a permanent injunction and ordered the defendants to return all infringing copies of the books to the authors.  The authors’ second motion for summary judgment, and the subject of the rest of this post, asked the district court to award the authors $150,000 for each work infringed, the maximum statutory damages for willful copyright infringement.  (17 U.S.C. §504(c)(1)-(2)).

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Copyright Owner Out-Hustles Flynt

When Ohio newscaster Catherine Bosley (aka Catherine Balsley) entered a wet t-shirt contest and danced nude at a bar while on vacation in Florida in March 2003, she didn’t realize that an amateur photographer was taking photographs of her.  Bosley lost her job as a news anchor when the amateur photographer posted photos of Bosley on the photographer’s website.  Bosley and her husband acquired all rights to the photos from the photographer and registered the copyrights with the Copyright Office in August 2004.

LFP, Inc. (aka Larry Flynt Publications) publishes Hustler magazine, which “contains graphic images and stories about sex.”  “Hot News Babes” is a recurring item in the magazine.  A Hustler reader nominated Bosley as a “hot news babe” in August 2005.  The reader did not provide Hustler with photos of Bosley, but told Hustler that it could find photos on the Internet.  One of the photos Hustler obtained online was a photo for which Bosley and her husband owned the copyright.  The photo included a visual copyright notice.  Hustler’s editors knew that the photo was copyrighted, but published the photo in the February 2006 edition without locating the copyright owner and without obtaining a license.  Hustler’s attorney advised Hustler that it could publish the photo as a fair use.  Bosley found out about the publication and filed suit against LFP for copyright infringement and other claims in February 2008.

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Louis Vuitton Jury Verdict Reduced When Ninth Circuit Clarifies Damages Calculation

Louis Vuitton was awarded $21,000,000 in statutory damages for willful contributory trademark infringement and $600,000 in statutory damages for willful copyright infringement by the district court against two defendants following a jury trial.  On appeal in Louis Vuitton Malletier v. Akanoc Solutions, the Ninth Circuit affirmed the district court’s rulings on liability, but disagreed with the district court’s damages calculations and vacated and remanded the judgment.

Facts.  Louis Vuitton distributes luxury merchandise displaying its trademarks and copyrighted designs.  It discovered websites it believed were selling goods that infringed its trademarks and copyrights.  The websites listed email addresses that prospective customers could contact, but the websites did not sell merchandise directly.  Louis Vuitton determined that the Internet Protocol (IP) addresses used by the websites were assigned to Managed Solutions Group, Inc., (MSG) and Akanoc Solutions, Inc., based in San Jose, California. 

MSG leased servers, bandwidth and IP addresses to Akanoc Solutions, Inc.  Akanoc ran a web hosting business with these resources.  Both companies were managed by Steven Chen.  Louis Vuitton sent MSG, Akanoc and Chen at least eighteen Notices of Infringement, describing the trademark and copyright infringements and demanding the removal of the infringing content.  Louis Vuitton received no response and sued MSG, Akanoc and Chen for contributory copyright and trademark infringement.  Louis Vuitton determined that the direct infringers were in China.  From the court’s description of the facts, the website owners were the initial contributory infringers and the defendants were a second tier of contributory infringers.  The people who used their email addresses to conduct the infringing sales were the direct infringers.

The case went to a jury trial.  The jury found in favor of Louis Vuitton, awarding $10,500,000 against each of the three defendants for statutory damages for willful contributory trademark infringement of thirteen trademarks ($31,500,000 total on trademark) and $300,000 against each defendant for statutory damages for willful copyright infringement of two copyrights ($900,000 total copyright). 

Defendants moved for judgment as a matter of law following the verdict.  The district court granted MSG’s motion.  It concluded that the evidence did not show that MSG sold domain names or operated the servers.  The district court denied Akanoc’s and Chen’s motions, awarded statutory damages against them and permanently enjoined them from participating in similar conduct.  Akanoc and Chen appealed.  Louis Vuitton cross-appealed the district court’s order granting MSG’s motion for judgment as a matter of law.

The Ninth Circuit’s opinion addressed the cross-appeal, Akanoc’s and Chen’s motion for judgment as a matter of law, jury instructions and damages.  This blog post discusses the damages calculations.

Copyright Damages Calculation.    17 U.S.C. §504(c)(1) describes statutory damages:

[T]he copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $750 or more than $30,000 as the court considers just.

The statutory maximum for willful copyright infringement under 17 U.S.C. §504(c)(2) is $150,000, but the jury awarded $300,000 per defendant for willful contributory copyright infringement on two Louis Vuitton copyrights.  The district court did not think this award violated the statutory maximum, since it worked out to $150,000 per copyright per defendant.  The district court did not specify whether the defendants were separately liable or jointly and severally liable.

The Ninth Circuit stated:

[W]hen statutory damages are assessed against one defendant or a group of defendants held to be jointly and severally liable, each work infringed may form the basis of only one award, regardless of the number of separate infringements of that work.

(Opinion pdf page 15).

The Ninth Circuit pointed out that “there was no legal basis for multiplying the award by the number of defendants.”  (Opinion pdf page 16).  Copyright statutory damages maximums are calculated based on the number of protected works, not the number of defendants.  The district court’s award was $600,000 for two works, twice the $150,000 per work statutory maximum.

Trademark Damages Calculation15 U.S.C. §1117(c)(2) sets out the statutory maximum for willful trademark infringement involving counterfeit marks.

if the court finds that the use of the counterfeit mark was willful, not more than $2,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just.

The statutory maximum changed from $1,000,000 to $2,000,000 while the case was pending and the parties agreed that the $1,000,000 maximum would apply.  The jury award of $10,500,000 per defendant was for the willful contributory infringement of thirteen marks.  The district court did not think this award violated the statutory maximum, either, as it worked out to $807,692 per trademark per defendant.

The Ninth Circuit applied the same reasoning to the trademark award as it did the copyright award, indicating that “15 U.S.C. §1117(c) entitles a plaintiff to anaward, not multiple awards.”  (Opinion pdf page 16).  The award of $10,500,000 per defendant exceeded the statutory maximum.

The Ninth Circuit determined that a new trial on the issue of damages was not necessary, as the jury intended each defendant to be liable for the same amount of damages.  The court ruled that the jury award should be enforced against Akanoc and Chen by making them jointly and severally liable for a single trademark damages award and a single copyright damages award.

This case is Louis Vuitton Malletier v. Akanoc Solutions, Inc., No. 10-15909.