The US Supreme Court will decide when to award attorneys’ fees to a prevailing party under the Copyright Act Law (Kirtsaeng v. John Wiley & Sons, Inc., US No. 15-374).
In 1997, Thailand native, Supap Kirtsaeng, came to the United States to study mathematics at Cornell University. He discovered that textbooks published by John Wiley & Sons, Inc. were considerably more expensive to buy in the United States than in his home country. Kirtsaeng asked his friends and relatives in Thailand to buy these books there and ship them to him, which he then sold in the U.S. on eBay at a profit.
In 2008, John Wiley & Sons, Inc. sued Kirtsaeng for copyright infringement, arguing that textbooks made outside of the United States are only licensed for sale exclusively abroad. Wiley won the case in the lower courts, Kirtsaeng appealed in the Second Circuit Court of Appeals. The Appeals Court upheld the ban on importation of copyrighted works without the permission of the copyright owner.
Kirtsaeng then appealed to the US Supreme Court, arguing that books legally bought by his friends, and the first-sale doctrine should allow him to resell those books in the US. Kirtsaeng argued that the first-sale right of the buyer was more important than the copyright owner’s rights to control importation.
In 2013, The Supreme Court decided that the first-sale doctrine applies to copyrighted goods manufactured outside of the U.S., and the protections and exceptions offered by the Copyright Act to works “lawfully made under this title” is not limited by geography. The Supreme Court reversed the Second Circuit’s decision, held that Kirtsaeng’s sale of lawfully-made and purchased books was protected by the first-sale doctrine, and the case went back to the district court for retrial.
Kirtsaeng then won the case in district court and sought an award of attorneys’ fees
However, the district court decided that it has discretion to award attorney’s fees. Because Wiley’s suit was not “frivolous” or “objectively unreasonable,” the district court held that awarding Kirtsaeng attorney’s fees would “not promote the purposes of the Copyright Act.” The Second Circuit affirmed the decision. The Second Circuit placed “substantial weight” on the whether the losing party’s claim or defense was objectively unreasonable, i.e. whether the losing party’s claim was clearly without merit or devoid of legal or factual basis.
The case went to the Supreme Court again because there is great diversity in awarding attorney fees in the many Appeals Circuits. Those standards range from a presumption in favor of fee awards (Fifth and Seventh Circuits) to a presumption against fee awards when the losing party’s claims or defenses were not objectively unreasonable (Second Circuit).
This case was recently argued before the Supreme Court in April 2016. It remains interesting to see the Court decision
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