Most cases never make it to the United States Supreme Court. Supap Kirtsaeng will now be there for the second time in less than five years. The Kirtsaeng v. John Wiley & Sons case is now back before the Supreme Court, this time on the issue of the standard for determining attorneys’ fees to a prevailing party in a copyright case. Kirtsaeng’s petition for certiorari was granted last Friday, January 15. Regardless of the outcome, the decision will have important implications for plaintiffs and defendants alike.
Kirtsaeng was a Cornell graduate student who became aware that foreign versions of certain textbooks cost far less than U.S. versions of the same textbook. To make money, Kirtsaeng lawfully bought copies of the books overseas, and then sold them in the U.S. for less than the publisher’s price. John Wiley & Sons, a textbook publisher, sued Kirtsaeng for copyright infringement in the Southern District of New York. Kirtsaeng argued from the beginning that he was protected under the U.S. Copyright Act’s “First Sale” doctrine. In general terms, that doctrine explains that once a copyright holder sells a copy of her work, those copies of her work can be resold without seeking her permission.
After the District Court rejected Kirtsaeng’s first-sale defense, a jury found Kirtsaeng liable for willfully infringing eight works and awarded Wiley $600,000 in statutory damages. On appeal, the Second Circuit affirmed that the first-sale doctrine was inapplicable. But in 2013, the Supreme Court held that the first-sale doctrine applied to copies of works lawfully made outside of the United States and later brought to the United States for resale.
The Current Dispute
After the Supreme Court ruled in Kirtsaeng’s favor and remanded, Kirtsaeng moved for attorney’s fees, seeking $2.04 million in fees and reimbursement of litigation expenses as the prevailing party pursuant to 17 U.S.C. § 505, the attorney’s fees provision of the Copyright Act. Once again, the district court sided against Kirtsaeng, finding that because Wiley’s claim was not objectively unreasonable or frivolous, Kirtsaeng was not entitled to a fee award. Kirtsaeng appealed to the Second Circuit, which affirmed.
Thus, at issue is how courts should determine when to “award a reasonable attorney’s fee to the prevailing party.”
This issue has been the subject of debate for a few years. In Fogerty v. Fantasy, the Supreme Court, in a footnote, listed “nonexclusive” factors for a court to consider, including frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case), and considerations of compensation and deterrence.
In his petition for certiorari, Kirtsaeng argues that the various circuits’ application of this statutory language has varied widely, from simply considering “whether the prevailing party’s claim or defense furthered the interests of the Copyright Act, with no presumptions one way or the other” (Ninth and Eleventh Circuits) to applying a presumption in favor of a fee award for prevailing parties (Fifth and Seventh Circuits) to applying Fogerty’s nonexclusive factors (Third, Fourth, and Sixth Circuits). Kirtsaeng further argues that the Second Circuit’s approach places “‘substantial weight’ on whether the losing party’s claim or defense was objectively unreasonable—which is to say, whether the losing party’s claim was clearly without merit or devoid of legal or factual basis.” According to Kirtsaeng, this creates a “presumption against awarding fees.”