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Seventh Circuit: Prevailing defendants should have greater presumption of fees in copyright cases

By McKee, Voorhees & Sease, P.L.C.

In a decision Wednesday, the Seventh Circuit reversed a district court's denial of attorney fees to a prevailing defendant in a copyright case.  The district court found that, as a matter of law, no copyright infringement occurred, but declined to award attorney's fees.

The Seventh Circuit reversed.  The court held the suit was frivolous, and brought in bad faith.  The plaintiff deposed all of the defendant's customers and several potential customers, resulting in the defendant losing several customers.  Further, the plaintiff was not eligible for statutory damages and had suffered no actual damages, and even if there was infringement, the defendant's profits were not tied to the infringement, as the asserted copyright was in a compilation of OSHA regulations that would be easily replaced by simply copying the appropriate regulations anew.  

The court also criticized other courts (such as the Sixth Circuit) who have held prevailing defendants are only entitled to attorney fees in copyright cases when the claims are "colorable, albeit meritless," as not in compliance with the Supreme Court's Fogerty v. Fantasy, Inc. decision.  In rejecting this position, the court offered some favorable dicta for defendants:

If there is an asymmetry in copyright, it is one that actually favors defendants. The successful assertion of a copyright confirms the plaintiff's possession of an exclusive, and sometimes very valuable, right, and thus gives it an incentive to spend heavily on litigation.  In contrast, a successful defense against a copyright claim, when it throws the copyrighted work into the public domain, benefits all users of the public domain, not just the defendant; he obtains no exclusive right and so his incentive to spend on defense is reduced and he may be forced into an unfavorable settlement.

More concerning Eagle Servs, Corp. v. H2O Indus. Servs., Inc. after the jump.

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Full post as published by FileWrapper on July 11, 2008 (boomark / email).