Kirtsaeng v. John Wiley & Sons, Inc. - 136 S. Ct. 1979 (2016)

Rule:

Section 505 of the Copyright Act provides that a district court may award a reasonable attorney’s fee to the prevailing party in a copyright infringement action. 17 U.S.C.S. § 505. A district court, in exercising that authority, should give substantial weight to the objective reasonableness of the losing party’s position. But the court 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 a losing party has advanced a reasonable claim or defense.

Facts:

In Kirtsaeng v. John Wiley & Sons, Inc., 568 U. S. ___, 133 S. Ct. 1351, 185 L. Ed. 2d 392, the U.S. Supreme Court held that petitioner Supap Kirtsaeng could invoke the Copyright Act's “first-sale doctrine” as a defense to the copyright infringement claim filed by textbook publisher John Wiley Sons, Inc. Having won his case, petitioner returned to the District Court to seek more than $2 million in attorney's fees from Wiley under the Copyright Act's fee-shifting provision. The District Court denied petitioner’s application because, it reasoned, imposing a fee award against a losing party that had taken reasonable positions during litigation would not serve the Act's purposes. Affirming, the Second Circuit held that the District Court was correct to place “substantial weight” on the reasonableness of Wiley's position and that the District Court did not abuse its discretion in determining that the other factors did not outweigh the reasonableness finding. The Court granted certiorari. 

Issue:

Did the district court err in denying petitioner’s application for attorney’s fees? 

Answer:

Yes.

Conclusion:

The Court noted that when deciding whether to award attorney's fees under §505, a district court should give substantial weight to the objective reasonableness of the losing party's position, while still taking into account all other circumstances relevant to granting fees. Still, objective reasonableness can be only a substantial factor in assessing fee applications--not the controlling one. In deciding whether to fee-shift, district courts must take into account a range of considerations beyond the reasonableness of litigating positions. According to the Court, while the Second Circuit properly called for district courts to give “substantial weight” to the reasonableness of a losing party's litigating positions, its language at times suggests that a finding of reasonableness raises a presumption against granting fees, and that went too far in cabining the district court's analysis. Because the District Court thus may not have understood the full scope of its discretion, it should have the opportunity to reconsider Kirtsaeng's fee application. On remand, the District Court should continue to give substantial weight to the reasonableness of Wiley's position but also take into account all other relevant factors.