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Mealey's IP/Tech - 9th Circuit Reverses As 'Unreasonable' Fee Award In Copyright Case

SAN FRANCISCO - In a Dec. 19 holding, the Ninth Circuit U.S. Court of Appeals upheld a California federal judge's denial of summary judgment on copyright infringement claims but vacated and remanded an award of attorney fees on behalf of a prevailing defendant (Anthony Johnson v. Storix Inc., No. 16-55439, 9th Cir., 2017 U.S. App. LEXIS 25682).
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  • The fee award was remanded to the district court for reconsideration. In June 2018, the same district court reduced the unprecedented $543,000 award to $419,000. The award is still the only attorney fee award in a copyright case against a party with an objectively reasonable case since Kirtsaeng Supreme Court decision, and the largest against any individual in U.S. History. In this case, Johnson was the sole creator of the software and was the founder and sole shareholder, officer and director of Storix at the time he allegedly transferred his rights to the company via an "oral agreement" that only he was a party to - as dictated by his former employees who were gifted 60% share of Johnson's company when he was diagnosed with terminal cancer (but were unhappy when Johnson beat 3% odds of survival).

    Storix has not and cannot register the copyright it now owns because the Copyright Office will not record a transfer without a written agreement or a "note or memorandum" that does not identify a copyright to transfer. Without Johnson's expertise, Storix has not been able to produced a single improvement to the software since February 2014, but has nevertheless sued Johnson in California court for over 3 1/2 years for allegedly "stealing" a copy of his own software and allegedly "intending" to compete with his own company. Such is the punishment an author of a creative work can expect for believing they own the copyright to the software they registered when attempting to fight a behemoth law firm like Procopio, Cory, Hargreaves & Savitch.