June 16, 2016

Supreme Court Decides Kirtsaeng v. John Wiley & Sons, Inc.

On June 16, 2016, the U.S. Supreme Court decided Kirtsaeng v. John Wiley & Sons, Inc., No. 15-375, holding that, in assessing whether a prevailing party in copyright litigation should recover its attorneys’ fees, the “objective reasonableness” of the losing party’s arguments is “an important factor” but “not the controlling one.” A district court “must also give due consideration to all other circumstances relevant to granting fees.”

Supap Kirtsaeng came to the United States from Thailand to study math. He noticed that the same textbooks were sold for far less in Thailand than in the U.S., and began buying books in Thailand and re-selling them for a profit in the United States. The publisher John Wiley sued, claiming that this infringed its copyright. Three years ago, the Supreme Court granted certiorari for the first time in Kirtsaeng’s case and held that his conduct was lawful.

Having won on the merits, Kirtsaeng sought an award of attorneys’ fees under 17 U.S.C. § 505, which authorizes such awards for “the prevailing party.” The district court denied the award, noting the “objective reasonableness of Wiley’s infringement claim,” and the Second Circuit affirmed.

The Supreme Court unanimously vacated and remanded. The Court agreed that the degree of objective reasonableness of a losing party’s position is relevant to its vulnerability to a fee award. This “both encourages parties with strong legal positions to stand on their rights and deters those with weak ones from proceeding with litigation.” The Court also noted that considering the strength of the losing party’s position will impose little additional burden on the courts, because “[i]n deciding any case a judge cannot help but consider the strength and weakness of each side’s arguments.”

The Court cautioned, however, that “objective reasonableness can be only an important factor in assessing fee applications—not the controlling one.” A district court therefore “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.” Other factors may include “litigation misconduct” or “repeated instances of copyright infringement or overaggressive assertion of copyright claims, again even if the losing position was reasonable.” The Court noted that the Second Circuit “at times suggests that a finding of reasonableness raises a presumption against granting fees,” and held “that goes too far in cabining” a district court’s discretion to review all “relevant factors.”

Justice Kagan delivered the opinion for a unanimous Court.

Download Opinion of the Court

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