United States District Court, D. Arizona
BRIDGET S. BADE, UNITED STATES MAGISTRATE JUDGE
Ugly Pools Arizona, Inc., and Brian Morris
(“Defendants”), have filed a motion for
attorney's fees and costs (Doc. 102) and a motion for
sanctions. (Doc. 103.) Plaintiff opposes both motions, which
are fully briefed. (Docs. 105, 106, 107, 109.) For the
reasons below, the Court denies the motion for attorney's
fees and costs. The Court considers the motion for sanctions
in a separate order.
September 17, 2015, Plaintiff filed a complaint asserting
copyright infringement under the Copyright Act, 17 U.S.C.
§ 501, and unfair competition under Arizona law. (Doc.
1.) The Court granted Plaintiff leave to file an amended
complaint, and Plaintiff filed its First Amended Complaint
(“FAC”). (Docs. 38, 30.) Plaintiff asserted the
following three counts: (1) copyright infringement under the
Copyright Act, 17 U.S.C. § 501(a) (Count One); (2)
unfair competition under Arizona law (Count Two); and (3)
violation of the Digital Millennium Copyright Act
(“DMCA”), integrity of copyright management
information under 17 U.S.C. § 1202 (Count Three). (Doc.
parties filed cross-motions for summary judgment on all three
counts of the FAC. (Docs. 43, 45.) On June 9, 2017, the Court
granted summary judgment in favor of Defendants on Count Two.
(Doc. 64.) The Court granted summary judgment in favor of
Defendants on Plaintiff's removal of copyright management
information claim under 17 U.S.C. § 1202(b), asserted in
Count Three. (Id. at 42.) The Court denied both
motions for summary judgment on Plaintiff's falsification
of copyright management information claim under 17 U.S.C.
§ 1202(a), asserted in Count Three. (Id.) The
Court denied without prejudice both motions for summary
judgment on Count One, copyright infringement. (Id.)
June 2017 order, the Court considered whether Plaintiff had
properly registered its copyright and met the registration
precondition for bringing a copyright infringement suit.
(Id. at 12-13); see 17 U.S.C. § 411(a)
(“no action for infringement of the copyright in any
United States work may be instituted until registration of
the copyright has been made in accordance with this
title.”). Based on evidence that Plaintiff had
knowingly provided inaccurate information to the copyright
office during the copyright registration process, the Court
concluded that the statutory criteria for mandatory referral
to the copyright office under 17 U.S.C. § 411(b)(2) had
been satisfied. (Doc. 64 at 24.) Therefore, on June 27, 2017,
the Court sent a request for advice to the Register of
Copyrights. (Doc. 67.)
September 5, 2017, the Register of Copyrights responded to
the Court's inquiry and stated that: (1) it would have
refused registration of Plaintiff's copyright with a July
3, 2014 publication date had it known that the submitted
website included copyrightable content that was added after
July 3, 2014; and (2) it “would have demanded a copy of
the deposit as published on July 3, 2014”; or (3) it
would have “asked Plaintiff to limit its claim to
material published on August 26, 2015, and to revert back to
the 2015 year of completion, and the August 26, 2015 date of
publication, for the original application.” (Doc. 72-1
at 8.) If Plaintiff had “refused to limit the claim and
revert back to the August 26, 2015 date of first publication
and 2015 year of completion, the Acting Register would have
refused registration.” (Id.)
receiving the Register of Copyrights' response, the Court
permitted the parties to file second motions for summary
judgment on Plaintiff's copyright infringement claim
asserted in Count One of the FAC. (Docs. 73, 78, 79.) On
September 24, 2018, the Court granted Defendants' second
motion for summary judgment on Plaintiff's copyright
infringement claim and denied Plaintiff's second motion
for summary judgment on that claim. (Doc. 95.) The Court
explained that Plaintiff had “not properly registered
the work at issue in this case” and, therefore,
“the copyright registration [was] insufficient to
support a copyright infringement claim . . . .”
(Id. at 26.) The Court also allowed Defendants to
file a third motion for summary judgment on Plaintiff's
claim for false copyright marking under 17 U.S.C. §
1202(a). (Docs. 83, 94.) On September 24, 2018, the Court
granted summary judgment in favor of Defendants on that
claim. (Doc. 96.) The Court entered judgment in
Defendants' favor and dismissed Plaintiff's cause of
action. (Doc. 97.)
have now filed a motion for attorney's fees and
costs. (Doc. 102.) A party requesting an award of
attorneys' fees must show that it is (a) eligible for an
award, (b) entitled to an award, and (c) requesting a
reasonable amount. See LRCiv 54.2(c). Defendants
seek attorney's fees and costs pursuant to 17 U.S.C.
§ 505 on Plaintiff's copyright infringement claim
(Count One), unfair competition claim (Count Two), and DMCA
claims (Count Three). (Id. at 3-8.) Defendants
alternatively seek attorney's fees pursuant to 17 U.S.C.
§ 1203(b)(5) on Plaintiff's DMCA claims.
(Id. at 8-11.) As set forth below, the Court denies
Defendants' motion for attorney's fees and costs.
Attorney's Fees under § 505 of the Copyright
505 of the Copyright Act provides that the court “may .
. . award reasonable attorney's fees to the prevailing
party as part of the costs.” 17 U.S.C. § 505. The
same standard applies to both prevailing defendants and
plaintiffs. Fogerty v. Fantasy, Inc., 510 U.S. 517,
523 (1994). The determination of attorney's fees under
§ 505 is left to the court's discretion.
Id. However, “[t]he automatic awarding of
attorney's fees to the prevailing party would pretermit
the exercise of that discretion.” Id. at 533;
see also Kirtsaeng v. John Wiley & Sons, Inc.,
U.S., 136 S.Ct. 1979, 1985 (2016) (“[A] district court
may not ‘award [ ] attorney's fees as a matter of
course' . . . .”) (quoting Fogerty, 510
U.S. at 533).
determining whether to award attorney's fees in a
copyright case, the court may consider “several
non-exclusive factors” including: “[the degree of
success obtained], frivolousness, motivation, objective
unreasonableness (both in the factual and in the legal
components of the case), and the need in particular
circumstances to advance considerations of compensation and
deterrence.” Kirtsaeng, 136 S.Ct. at 1985
(citing Fogerty, 510 U.S. at 534 n.19); Perfect
10, Inc. v. Giganews, Inc., 847 F.3d 657, 675 (9th Cir.
2017) (stating that the court may consider “the degree
of success obtained in the litigation” and
“whether the chilling effect of attorney's fees may
be too great”). District courts should “accord
substantial weight to” the “reasonableness of
[the] losing party's legal and factual arguments.”
Shame on You Prods., Inc. v. Banks, 893 F.3d 661,
666 (9th Cir. 2018); see also Kirtsaeng, 136 S.Ct.
at 1989 (giving the reasonableness factor “significant
weight”). “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 the losing party advanced a
reasonable claim or defense.” Kirtsaeng, 136
S.Ct. at 1983.
Attorney's Fees for the Copyright Infringement
their motion, Defendants seek an award attorney's fees
incurred in defending against Plaintiff's copyright
infringement claim. Plaintiff opposes the
motion. (Doc. 106.) Upon consideration of the
relevant factors, discussed below, the Court concludes that
Defendants are not entitled to an award of attorney's
fees on the copyright infringement claim.
‘prevailing party' is one who has been awarded some
relief by the court. The key inquiry is whether some court
action has created a material alteration of the legal
relationship of the parties.” Cadkin v. Loose,
569 F.3d 1142, 1148-49 (9th Cir. 2009) (internal citation and
quotation marks omitted). A court action materially alters
“the legal relationship of the parties” when it
“deprive[s the losing party] of the ability to seek
relief in federal court” under the Copyright Act
against the party that is seeking a fee award. Id.
at 1150 (defendants were not “prevailing parties”
under § 505 because the claims against them were
dismissed voluntarily and without prejudice and defendants
“remain[ed] subject to the risk” that the
plaintiffs could refile the copyright claims). Thus, a
“defendant is a prevailing party following dismissal of
a claim if the plaintiff is judicially precluded from
refiling the claim against the defendant in federal
court.” Id.; see Tavory v. NTP, Inc.,
297 Fed.Appx. 986, 989-90 (Fed. Cir. 2008) (dismissal of
copyright infringement claim based on invalid registration
materially altered the legal relationship between the parties
because “[b]y finding the deposit copy of that work to
be an invalid reconstruction, the court essentially decided
that [plaintiff] cannot ever succeed in a copyright
infringement claim against [defendant] based on the work
represented in that invalid copy”).
assert that they are the prevailing party in this matter.
(Doc. 102 at 1.) Plaintiff does not oppose that assertion.
(Doc. 106.) The Court concludes that Defendants are the
prevailing party because the Court dismissed the claims
against them with prejudice, which materially altered the
relationship between Plaintiff and Defendants. See
Cadkin, 569 F.3d at 1148-49. Therefore, this factor
favors an award of attorney's fees.
The Degree of Success Obtained
Ninth Circuit has noted that successful defenses “do
not always implicate the ultimate interests of
copyright” because “copyright defendants do not
always reach the merits, prevailing instead on technical
defenses, ” such as “statute of limitations,
laches, or the copyright registration requirements.”
Fantasy, Inc. v. Fogerty, 94 F.3d 553, 560 (9th Cir.
1996) (Fogerty II); see also VMG Salsoul, LLC v.
Ciccone, 2014 WL 12585798, at *2 (C.D. Cal. Aug. 28,
2014). Thus, the degree of success factor “weighs more
in favor of a party who prevailed on the merits, rather than
on a technical defense.” DuckHole Inc. v. NBC
Universal Media LLC, 2013 WL 5797204, at *2 (C.D. Cal.
Oct. 25, 2013). When a defendant has prevailed on a technical
defense, courts consider whether the defendant remains
subject to future claims by the plaintiff or whether the
plaintiff's claims were dismissed with prejudice. See
Epikhin v. Game Insight N.A., 2016 WL 1258690, at *4-5
(N.D. Cal. Mar. 31, 2016) (finding the degree of success
factor neutral when the defendants prevailed on a technical
defense rather than on the merits and the plaintiff's
claims were dismissed without prejudice).
argue that their success in this matter was
“complete.” (Doc. 102 at 3.) In support of this
position they rely on the final judgment in their favor on
Plaintiff's copyright claim. (Id.; see
also Docs. 64, 95, 97.) Plaintiff responds that
Defendants prevailed on a technical defense-Plaintiff's
failure to satisfy the registration precondition-that does
not support an award of attorney's fees. (Doc. 106 at
7-8.) Defendants prevailed on the issue of the invalidity of
the copyright registration. (Doc. 95.) As Plaintiff argues,
this was a technical defense. See Fogerty II, 94
F.3d at 560; Epikhin, 2016 WL 1258690, at *4.
“it is important that parties who seek the benefits of
copyright registration have proceeded in accordance with
those rules to ensure that the process is fair and
effective.” Gold Value Int'l Textile, Inc. v.
Sanctuary Clothing, 2017 WL 8236267, at *5 (C.D. Cal.,
Dec. 5, 2017). The importance of complying with the rules
governing copyright registration is illustrated by the
Register of Copyright's response to the Court's
inquiry- it would have refused the registration of
Plaintiff's copyright with a July 3, 2014 publication
date had it known that the submitted website included
copyrightable content that was added after July 3, 2014.
(See Doc. 72-1 at 8; Docs. 95 at 8-9.)
the Court dismissed Plaintiff's claims with prejudice.
(Doc. 95, 96, 97); see Minden Pictures, Inc. v. John
Wiley & Sons, Inc., 2014 WL 1724478, at *6 (N.D.
Cal. Apr. 29, 2014) (stating that defendant's degree of
success was “not insubstantial” when summary
judgment precluded plaintiff from “assert[ing] similar
claims against [the defendant] in any federal court based on
the underlying assignment or agency agreements at
issue”). The Court concludes that the degree of success
factor provides “modest weight in support an award of
fees and costs” because of the preclusive effect of the
judgment. See Gold Value, 2017 WL 8236267, at *5.
The Frivolousness of Plaintiff's Position
is frivolous when it is “clearly baseless, ”
involving “fantastic or delusional scenarios.”
Perfect 10, Inc. v. Visa Int'l Serv. Ass'n,
2005 WL 2007932, at *4 (N.D. Cal. Aug. 12, 2005) (quoting
Neitzke v. Williams, 490 U.S. 324, 327-28 (1989)).
An unsuccessful claim is not necessarily frivolous.
Neitzke, 490 U.S. at 329. “The standard for
frivolousness appears to be ‘somewhat' higher than
the standard for objective reasonableness.”
Epikhin, 2016 WL 1258690, at *6 (citation omitted).
assert that Plaintiff's claim for copyright infringement
was frivolous. (Doc. 102 at 4.) Defendants' assertion is
based on Plaintiff's evolving description of the
allegedly infringed copyrighted material as the
“Platform, ” “photographs and the software
required to show them in a 360-degree view, ” and later
as a “collection of photos.” (Id.;
see also Doc. 64 at 11-12 (discussing the changing
description of the allegedly infringed work).) In response to
Defendants' motion, Plaintiff does not directly address
its changing description of the allegedly infringed work.
(Doc. 106 at 5.) Rather, Plaintiff states that the FAC cannot
be construed as frivolous because it asserted a copyright
infringement claim against Defendants who admitted that they
made a copy of Plaintiff's “copyrighted work
(‘Works' or ‘Registered Photos' or U.S.
Copyright Office (‘USCO') Registration TX
8-268-803).” (Doc. 106 at 5.)
Plaintiff's continued narrowing of the description of the
work that formed the basis of its copyright infringement
claim complicated the resolution of the copyright
infringement claim, the Court finds that it does not render
Plaintiff's copyright infringement claim frivolous.
See Karam v. City of Burbank, 352 F.3d 1188, 1195
(9th Cir. 2003) (stating that a case is considered frivolous
only when the result is obvious or the arguments are wholly
lack merit); Goldberg v. Cameron, 2011 WL 3515899,
at *3 (N.D. Cal. Aug. 11, 2011) (finding copyright
infringement claim frivolous when ...