Dollar Dollar Bill Y’All – Attorneys Fees for Winning Defendants in Fair Use Wins

In two recent cases, federal district courts awarded attorneys’ fees to defendants in copyright infringement claims who prevailed on the basis of fair use.

I think the “fair use” defense is the most over-pled defense in copyright cases.  For example, in 2010, Warner Bros. Records sued the owner of the pornographic website Reality Kings, alleging that videos shot in nightclubs and private parties featured Warner’s copyrighted music.  In some videos, the “actors” allegedly lip-synch the song or perform sexual acts that link thematically with the track (for example, Katy Perry’s “I Kissed A Girl”).  According to Reality Kings attorney Marc Randazza, Reality Kings’ unauthorized use was “fair” because when you “… film in a live night club, you’re going to absorb some of the ambient sounds.  You are going to hear what the DJ is playing, and if someone can tell me how to shoot at a nightclub and police out the music in the background, I’m all ears.” (read more here).  Sometimes, however, a defendant’s use really is fair.  And, in even rarer cases, a defendant whose use is fair gets his attorneys’ fees back.

Seltzer v. Green Day, Inc., No. 10-2103 (C.D. Cal. Nov. 17, 2011)

By way of background, on March 23, 2010, Derek Seltzer, an artist, brought suit against Green Day for using Seltzer’s work, Scream Icon, as part of a video backdrop shown during live performances of Green Day’s song East Jesus Nowhere.  On August 18, 2011, the court granted summary judgment in favor of Green Day on all claims, finding that “the different visual elements added, including graffiti, a brick backdrop, and (especially) the large red cross over the image, considered in connection with the music and lyrics of East Jesus Nowhere, ‘add something new, with a further purpose or different character’ than Plaintiff’s original work.”

Green Day moved for its attorneys’ fees as the prevailing party under 17 U.S.C. § 505. (“In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.”).  The district court noted that “The pivotal inquiry is whether the successful defense furthered the goals of the Copyright Act.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994)

The court lays out the Fogerty factors a court considers when deciding whether to award attorney fees to the prevailing party:

These factors are: (1) the degree of success obtained; (2) frivolousness; (3) motivation; (4) the objective unreasonableness of the losing party’s factual and legal arguments; and (5) the need, in particular circumstances, to advance considerations of compensation and deterrence.

The court concluded that:

Just as John Fogerty’s defense of his copyright in “the Old Man Down the Road” vindicated his right and the right of others to compose music in the distinctive “Swamp Rock” style, Staub and the Green Day defendants’ successful defense of the video backdrop and the East Jesus Nowhere performance-experience secured the public’s access to these works and paved the way for the Defendants and others to manipulate and reinterpret street art in the creation of future multimedia compilations. See Fantasy, 94 F.3d at 556. Because the Defendants’ success “enrich[ed] the general public through access to creative works,” paved the way for the creation of new works, and furthered the Copyright Act’s “peculiarly important” interest in demarcating the boundaries of copyright law, the Court finds that the fair use defense of the video backdrop and the East Jesus Nowhere live performance implicated the ultimate interests of copyright and should be encouraged. See id.; Fogerty, 510 U.S. at 527 (defendants “who seek to advance a variety of meritorious copyright defenses should be encouraged to litigate them”). .

It probably didn’t help that Seltzer’s attorney had cited to an overturned case as binding precedent (“Plaintiff’s citation to Hustler, a case applying the “dual” standard rejected by the Supreme Court in Fogerty, edges close to an affirmative attempt to mislead the Court.”)

Brownmark Films, LLC v. Comedy Partners, 10-cv-1013 (E.D. Wis., Nov. 30, 2011),

In the South Park “What What in the Butt” case discussed here, the district court granted defendant Comedy Central’s motion to dismiss.  Comedy Central moved for its attorneys’ fees.  The district court noted the relevant 7th Circuit refinement of Fogerty:

According to the Seventh Circuit, the “two most important [of these] considerations…are the strength of the prevailing party’s case and the amount of damages or other relief the party obtained.” Assessment Techs. of Wisconsin, LLC v. Wire Data, Inc., 361 F.3d 434, 436 (7th Cir. 2004). Furthermore, the Seventh Circuit has specifically noted that, while “prevailing plaintiffs and prevailing defendants are to be treated alike,” the presumption in favor of awarding fees to a prevailing defendant is “very strong.” Id., at 436–37 (refining Fantasy, 510 U.S. at 534; citing Diamonds Star Building Corp. v. Freed, 30 F.3d 536, 506 (4th Cir. 1994)).

The district court determined that

The defendants’ fair-use argument was very strong, and Brownmark’s legal position was objectively unreasonable. The Court took the somewhat rare step of deciding this case at the motion to dismiss stage, precisely because the defendants’ fair-use defense was so strong, satisfying all four fair-use factors. First, the Court found that South Park’s work was a “clear” parody, which one could gather quickly and easily from watching the episode. Second, South Park’s version of the video was transformative, using the series’ own characters and a different recording of the song, even if the words and images were similar. Third, even with those similarities, South Park made many changes to the form of the original and used only enough lines to conjure up the original. South Park’s use was insubstantial. And, fourth, the Court found that South Park’s version of the video would not usurp the market for Brownmark’s original. In fact, in this respect, it is most likely that South Park’s use would have spurred demand for the original, making the viral video’s spread more rapid after its exposure to a national television audience. The satisfaction of these factors shows that the defendants’ case was very strong.

Inquiring further, the Court finds that Brownmark’s legal positions were also objectively unreasonable, and thus their position was frivolous.  … Further, the Court is convinced that Brownmark’s motivation in filing this suit was questionable. Not only was Brownmark’s position unreasonable, but it also waited nearly two years to file a lawsuit, only after being repeatedly rejected with warnings that South Park’s use was copyrighted. (Docket #34, Ex. B). This demonstrates an attempt by Brownmark to use the threat of litigation against the defendants as a sort of “sword of Damocles”—hanging by a thread over the heads of the defendants while Brownmark attempted to extract a licensing fee.

However, having decided that the defendants were entitled to attorneys’ fees, the court, in its discretion, decided to reduce the award because of Brownmark’s limited resources; the court decided to “impose a fee that is lower than the $31,525.23 reasonable amount; this final feewill be tied to Brownmark’s size and ability to pay.”  It does strike me as a bit counter intuitive to argue, as the court does, that Brownmark was essentially trying to extort Comedy Central, but shouldn’t pay all of Comedy Central’s legal fees, because Brownmark can’t afford it.

The Green Day order is below:
[scribd id=75510852 key=key-228ao6iveakkzm31dnx7 mode=list]

The South Park order is below:
[scribd id=75510869 key=key-hfbmxfyvwuu130gsg9n mode=list]