Academic textbook publisher John Wiley & Sons, Inc. (Wiley) owns the American copyright for textbooks and often assigns its rights to its foreign subsidiaries to publish, print, and sell its textbooks abroad. Supap Kirtsaeng is a Thai citizen who came to the United States in 1997 to study mathematics. While he was in the United States, Kirtsaeng asked friends and family in Thailand to buy the English-language versions of his textbooks there, where they were cheaper, and mail them to him. Kirtsaeng would then sell the textbooks in America, where they were worth more, reimburse his friends and family, and make a profit. Supap Kirtsaeng came to the United States from Thailand to study math. He noticed that the same textbooks were sold for far less in Thailand than in the U.S., and began buying books in Thailand and re-selling them for a profit in the United States. The publisher John Wiley sued, claiming that this infringed its copyright. Three years ago, the Supreme Court granted certiorari for the first time in Kirtsaeng’s case and held that his conduct was lawful. Having won on the merits, Kirtsaeng sought an award of attorneys’ fees under 17 U.S.C. § 505, which authorizes such awards for “the prevailing party.” The district court denied the award, noting the “objective reasonableness of Wiley’s infringement claim,” and the Second Circuit affirmed. The Supreme Court unanimously vacated and remanded. The Court agreed that the degree of objective reasonableness of a losing party’s position is relevant to its vulnerability to a fee award. This “both encourages parties with strong legal positions to stand on their rights and deters those with weak ones from proceeding with litigation.” The Court also noted that considering the strength of the losing party’s position will impose little additional burden on the courts, because “in deciding any case a judge cannot help but consider the strength and weakness of each side’s arguments.” The Court cautioned, however, that “objective reasonableness can be only an important factor in assessing fee applications—not the controlling one.” A district court therefore “must also give due consideration to all other circumstances relevant to granting fees; and it retains discretion, in light of those factors, to make an award even when the losing party advanced a reasonable claim or defense.” Other factors may include “litigation misconduct” or “repeated instances of copyright infringement or overaggressive assertion of copyright claims, again even if the losing position was reasonable.” The Court noted that the Second Circuit “at times suggests that a finding of reasonableness raises a presumption against granting fees,” and held “that goes too far in cabining” a district court’s discretion to review all “relevant factors.” In 2008, Wiley sued Kirtsaeng for copyright infringement. The case went to the U.S. Supreme Court on the question of whether Kirtsaeng was barred from asserting an affirmative defense because the copyrighted works in question were manufactured abroad. The Court held that the affirmative defense was available to Kirtsaeng and remanded the case. Kirtsaeng won the case on remand and sought an award of attorneys’ fees and reimbursement of litigation expenses pursuant to Section 505 of the Copyright Act. The district court held that Section 505 provides that the court may “in its discretion” award attorney’s fees but is not bound to do so. Because Wiley’s suit was not “frivolous” or “objectively unreasonable,” the district court held that awarding Kirtsaeng attorney’s fees would “not promote the purposes of the Copyright Act.” The U.S. Court of Appeals for the Second Circuit affirmed.
When deciding whether to grant attorney’s fees under Section 505 of the Copyright Act, courts should give substantial weight to the objective reasonableness of the losing party’s position, but that determination should not be the controlling factor. Justice Elena Kagan delivered the opinion for the unanimous Court, which held that, while the objective reasonableness of the losing party’s position should be given substantial weight, the court retained discretion to consider that factor in light of other relevant considerations. While the language of Section 505 clearly granted a court discretion in awarding attorney’s fees, the Supreme Court had created some restrictions that advanced the overall goals of the Copyright Act — to encourage creation while allowing others to build on previous work. The objective reasonableness factor for determining fee awards furthered useful copyright litigation because it encouraged both parties to advance strong legal positions and deterred frivolous suits based on weak claims. However, any fee award analysis must take into account more than only this factor, as others were relevant to the court’s determination.
KEYWORDS: copyright act, copyright infringement
