Case Analysis: Recovering Defendants' Attorney's Fees in Copyright- Infringement Cases

It is rare that the successful party to litigation recovers the attorney's fees he spent for the lawsuit. Generally, fees may be awarded only when the parties agreed to such action in the written cont

It is rare that the successful party to litigation recovers the attorney's fees he spent for the lawsuit. Generally, fees may be awarded only when the parties agreed to such action in the written contract involved in the case, or when a specific statute permits recovery of fees for violation of that law.

The federal Copyright Act is one of these statutes. While the Act does not require a court to order the losing party to pay the winner's attorney fees, the law permits the court to use its discretion to award reasonable fees to the prevailing party.

Filing a copyright infringement suit can be costly, especially when the copyright owner has to fight a big company. Sometimes, lawyers agree to represent the plaintiff for a contingency fee -- a percentage of the ultimate judgment paid. This arrangement gives more individuals the ability to pursue a lawsuit.

When a copyright owner files a lawsuit and wins the case, the court often awards fees. However, the Copyright Act also gives the court discretion to award attorney's fees to the defendant if the plaintiff fails to prove his case. This could be devastating to individuals who can't even afford their own legal fees. However, this is a way to prevent frivolous lawsuits from being filed.

Although an award of attorney's fees is within the court's discretion, there are guidelines described in various cases for courts to follow.

In Nashville, a federal District Court awarded defendants MGM Universal Group Holdings (MGM Universal Music Group and Universal Studios) more than $170,000 in attorney's fees when they won a motion for summary judgment in an infringement case. However, the U.S. Court of Appeals for the Sixth Circuit reversed this award.

Following is an analysis of the Court of Appeals' Aug. 3 opinion regarding attorney's fees in Fogerty v. MGM Group Holdings Corp. Inc.

Plaintiffs Frank Fogerty and Nathan Crow co-wrote a song titled "This Game We Play." Fogerty approached Michael Sandoval at MGM in February 1999 and delivered a recording of the song. Crow claims that Sandoval liked the song and suggested that he might consider it for the film "The Thomas Crown Affair." Sandoval kept a copy of the recording.

About five months before that meeting, Michael Wilson and Barbara Broccoli, producers of the James Bond films, sought a composer to write the score for the 19th film in the series, "The World Is Not Enough." They selected David Arnold, a London-based composer.

Sandoval also received a recording of Arnold's song, "The World Is Not Enough," the same day he met with Crow. He played the Arnold song for other MGM executives.

Ultimately, "The World Is Not Enough" was recorded by Shirley Manson with her band, Garbage, and was used for the Bond film. This song shares an "identical four-note sequence" with the Fogerty-Crow song, according to the opinion.

Convinced that their song had been copied, Fogerty and Crow filed suit against MGM and the film's production company, Eon Prods.

Eventually, the District Court entered a summary judgment in favor of the defendants, concluding that Arnold "independently wrote" the sequence to his song and "did not have access" to the other song, required elements for a copyright-infringement claim. District Judge William Haynes Jr. then awarded the defendants attorney's fees, and the plaintiffs appealed.

The Court of Appeal affirmed the summary judgment, but reversed the award of attorney's fees.

The Court cited legal precedent in the Sixth Circuit, noting that a court may award fees to defendants in frivolous and objectively unreasonable lawsuits. The decision to award fees should be "based on such factors as the frivolousness of the claim, the motivation of the claimant, the reasonableness of the claim and the goal of deterring frivolous claims."

In this case, the Court considered whether plaintiffs' claim was frivolous. When they filed their complaint, they knew only that Crow delivered their song to Sandoval and that MGM used a very similar song for the Bond film 10 months later. The court noted that MGM did not contend that filing the complaint on this basis was "objectively unreasonable."

In fact, the Court wrote, "the imposition of a fee award against a copyright holder with an objectively reasonable litigation position will generally not promote the purposes of the Copyright Act."

Once the complaint was filed, other facts surfaced as discovery progressed. These facts "legitimately prompted plaintiffs to pursue their claim."

The facts included (1) an expert opinion that the two songs were substantially similar, (2) delivery of a recording of their song to Sandoval on the same day he received a recording of the other song, (3) the inability of the film's composer to produce a demo of an earlier version of his song, and (4) inconsistencies in Manson's and Arnold's recollections of when Manson first heard the film's song.

Concluding that plaintiffs' claim was not frivolous, the Appellate Court then reviewed the District Court's reasons for determining that the suit was "objectively unreasonable."

The District Court noted that plaintiffs pursued litigation despite multiple third-party declarations establishing independent creation of Arnold's song before any of the defendants had access to the Fogerty-Crow song.

The Appellate Court stated that these declarations contained "several inconsistencies" and were all submitted by individuals with a personal and professional stake in the matter of whether Arnold had copied a song that he represented as original. Although these inconsistencies proved to be immaterial to the copyright-infringement claim, the Court stated that plaintiffs were entitled to take depositions of these individuals to determine whether their recollections of the facts made sense.

The District Court also held that plaintiffs offered no direct evidence "to support one of the two basic elements of copyright infringement."

The Appellate Court stated that this could mean there was no direct evidence of either actual copying or Arnold's access to plaintiffs' song. On appeal, both of these possibilities were rejected as a basis to award attorney's fees.

First, the Appellate Court wrote, "direct evidence of copying is a rarity." Therefore, failure to provide such evidence "never supplies a basis for awarding attorneys' fees."

Second, plaintiffs were entitled to conduct reasonable discovery if discovery could uncover one or more substantial, factual issues. They had "several concerns that reasonably prompted them to continue discovery," noted the Court.

As a result, defendants could not recover attorney's fees.

Case: Frank P. Fogerty and Nathan Crow v. MGM Group Holdings Corp. Inc. d/b/a MGM Universal Music Group Inc., Universal Studios Inc., and EON Productions Ltd., Case Nos. 03-5498, 03-5874
Date: Argued June 9, 2004; decided and filed Aug. 3, 2004
Court: U.S. Court of Appeals for the Sixth Circuit (Tennessee), decided by Circuit Judges Martin and Sutton, with District Judge Holschuh sitting by designation, opinion written by Judge Sutton
Counsel for Plaintiffs: Blackburn & McCune by W. Gary Blackburn, Nashville; the Siegler Law Group by Adam Siegler, Beverly Hills, Calif.
Counsel for Defendants: Bowen, Riley, Warnock & Jacobson by Timothy L. Warnock and Jay S. Bowen, Nashville.


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