Supreme Court Offers Guidance On Standard For Obtaining Fees In Copyright Cases

For the second time this week, the Supreme Court unanimously clarified the legal standard for obtaining certain relief in intellectual property cases. In today’s opinion in Kirtsaeng v. John Wiley & Sons, Justice Kagan, writing for the Court, explained the analysis trial courts should engage in to determine whether and when to award attorneys’ fees to prevailing parties in copyright cases, which the applicable statute, 17 U.S.C. § 505, leaves to the lower courts’ discretion. Sticking to a theme sounded in its opinion in Halo Electronics, the high court ruled that the Second Circuit’s application of the standard risked excessive rigidity. In deciding whether to award fees, lower courts must give substantial weight to the objective reasonableness of the losing party’s position, but not so much weight that objective reasonableness becomes a presumptive bar to the award of fees. Rather, a district court must navigate a course in which it neither automatically awards fees nor automatically denies fees in the face of an objectively reasonable, but ultimately unsuccessful argument. In doing so, the trial judge should be guided by the larger objectives served by the underlying statute, here the Copyright Act, “to enrich[] the general public through access to creative works” by encouraging and rewarding authors’ creations while enabling others to build on them.

If one were to draw a single conclusion from the holdings of Kirtsaeng and Halo, it would be that, in the Supreme Court’s view, judicial discretion in awarding remedies in intellectual property cases must not be limited by “unduly rigid” rules that could prevent a trial court from fashioning relief suited to the specifics of a particular case. Appellate courts should resist the temptation to second–guess, but limit their review to whether the trial court plainly abused its discretion.