Forum on attorney's fees in copyright cases: are we running through the jungle now or is the old man still stuck down the road?

• Author: Marcus, Paul

In 1994, the Supreme Court handed down Fogerty v. Fantasy, Inc.,(1) its only opinion ever to address the matter of awarding fees in copyright infringement cases. In this forum, Paul Marcus and David Nimmer, two "brothers in copyright law"--who also happen to be brothers-in-law--put aside fraternal affections to debate the implications of that ruling.

1. SETTING THE STAGE FOR THE DEBATE

   DRONE ON(2)

   1. Background

      As leader of the band Creedence Clearwater Revival,(3) John Fogerty both performed and wrote many songs. In 1970, he sold exclusive publishing rights in a composition entitled "Run Through the Jungle" to the predecessor of Fantasy, Inc.(4) Although the band disbanded in 1972, Fogerty's career continued to flourish.(5) In 1985, he published a composition entitled "The Old Man Down the Road."(6) Fantasy alleged that Fogerty thereby infringed the copyright in his own earlier song.(7) In reply, Fogerty maintained that the only similarities between the two works inhered in the obvious fact that they shared a common author--by no stretch of the imagination did his assignment of the earlier work constitute a permanent covenant to refrain from future songwriting.(8)

      Applying established copyright doctrine, the jury found the two tunes in issue not substantially similar(9) and hence returned a verdict in Fogerty's favor.(10) Having prevailed through a long, grueling fight, Fogerty wished to recover (along with his restored pride) the attorney's fees that he had expended. The lower courts rebuffed his attempts.(11) The matter went to the United States Supreme Court, and the Court issued its ruling on the award of attorney's fees in copyright infringement cases. Before turning to the Court's opinion, some background is in order.

   2. The Law Before 1994

      Copyright infringement actions can involve enormous economic stakes.(12) Moreover, the copyright statute itself leverages the financial impact of litigation in this sphere by even allowing the award of attorney's fees, in contrast to the traditional American rule.(13) It is, therefore, perhaps surprising that the statutory language is so spare in discussing the awarding of fees. Section 505 of the Copyright Act of 1976 simply provides that "the court may . . . award a reasonable attorney's fee to the prevailing party as part of the costs."(14)

      The Copyright Act gives no guidance on such important matters as how the court is to determine who is the prevailing party(15) or the manner in which it is to measure the reasonableness of a fee.(16) More to the point, though, it appears that the legislature failed to consider the few crucial words regarding attorney's fees in the copyright statute, "the court may . . . award." The language, on its face, appears to grant the trial court virtually unfettered discretion in an infringement action. The appeals courts, however, split sharply on the way to exercise this discretion, particularly insofar as it related to actions in which defendants, rather than plaintiffs, prevailed.

   3. The Dual Approach

      Some courts awarded attorney's fees to prevailing plaintiffs in the normal course of events, routinely, "[b]ecause the Copyright Act is intended to encourage suits to redress copyright infringement...."(17) The Second and Ninth Circuits illustrate that trend.(18) Indeed, in its first opinion in the Fogerty case, the Ninth Circuit emphasized the encouragement incentive in rejecting the defendant's claim for an award. "The purpose of that rule is to avoid chilling a copyright holder's incentive to sue on colorable claims, and thereby to give full effect to the broad protection for copyrights intended by the Copyright Act."(19)

      Of course, with an emphasis on protection of the copyright holder's interest, it is not surprising that prevailing plaintiffs had little problem in receiving awards. It is also not surprising that the courts following this "dual standard"(20) would not allow awards to prevailing defendants without some showing of bad faith, a claim "objectively without arguable merit."(21) The standard certainly made the defense position difficult; some courts would only award attorney's fees to prevailing defendants "when the claims are frivolous or are brought in bad faith."(22)

   4. The Evenhanded Approach

      Other courts, finding no statutory reference to disparate treatment for plaintiffs and defendants, refused to use different standards in awarding attorney's fees. The Third Circuit exemplified this stand: "[W]e do not require bad faith, nor do we mandate an allowance of fees as a concomitant of prevailing in every case, but we do favor an evenhanded approach."(23) These courts considered numerous factors in deciding whether fees should be given and used those factors regardless of whether the plaintiff or the defendant prevailed.(24)

   5. The Supreme Court's Decision in Fogerty

      Based on the Ninth Circuit's previous adoption of the dual approach, the trial judge applied that standard to the request advanced after trial by Fogerty--a prevailing defendant in a copyright infringement action--to recover his attorney's fees.(25) Although the plaintiff, Fantasy, lost its action, the trial judge concluded its claim was neither frivolous nor brought in bad faith.(26) The Ninth Circuit affirmed, holding that, under the dual standard, successful defendants could not receive attorney's fees without a showing of improper action or motive on the part of the plaintiff.(27)

      The United States Supreme Court reversed.(28) Most of Chief Justice Rehnquist's opinion for the Court(29) focused on refuting the plaintiff's three arguments in support of the dual standard.(30) First, Fantasy contended the language in the statute was quite similar to the wording found in the Civil Rights Act of 1964.(31) The Court had held previously that such language should be construed so that a prevailing plaintiff, but not defendant, "should ordinarily recover an attorney's fee unless some special circumstances would render such an award unjust."(32) The Justices refused to apply the Copyright Act in a similar fashion. Congress intended "to achieve [important policy] objectives through the use of plaintiffs as `private attorneys general'" in the Civil Rights statutes, but the same was not true of the Copyright Act.(33)

      The goals and objectives of the two Acts are likewise not

      completely similar. Oftentimes, in the civil rights context,

      impecunious "private attorney general" plaintiffs can ill afford to

      litigate their claims against defendants with more resources.

      Congress sought to redress this balance in part, and to provide

      incentives for the bringing of meritorious lawsuits, by

      treating successful plaintiffs more favorably than successful

      defendants in terms of the award of attorney's fees. The primary

      objective of the Copyright Act is to encourage the production

      of original literary, artistic, and musical expression

      for the good of the public. In the copyright context, it has

      been noted that "[e]ntities which sue for copyright infringement

      as plaintiffs can run the gamut from corporate behemoths

      to starving artists; the same is true of prospective

      copyright infringement defendants."(34)

      The Chief Justice next turned to the contention that the policies of the Copyright Act would be best served by adopting the dual approach to the awarding of attorney's fees. Fantasy rooted its support for this view in the assumption that giving prevailing plaintiffs fees as a routine matter encourages "meritorious claims of copyright infringement."(35) The problem with this position, the Court found, is that "it expresses a one-sided view of the purposes of the Copyright Act."(36) The opinion identified a number of goals for the Act, only one of which is to discourage infringement.(37) Other goals, however, are also present. "[T]he policies served by the Copyright Act are more complex, more measured, than simply maximizing the number of meritorious suits for copyright infringement."(38) Indeed, the Court found just such a goal in John Fogerty's successful defense to the infringement action:

      Because copyright law ultimately serves the purpose of

      enriching the general public through access to creative works, it

      is peculiarly important that the boundaries of copyright law

      be demarcated as clearly as possible. To that end, defendants

      who seek to advance a variety of meritorious copyright defenses

      should be encouraged to litigate them to the same

      extent that plaintiffs are encouraged to litigate meritorious

      claims of infringement. In the case before us, the successful

      defense of "The Old Man Down the Road" increased public

      exposure to a musical work that could, as a result, lead to

      further creative pieces. Thus a successful defense of a copyright

      infringement action may further the policies of the

      Copyright Act every bit as much as a successful prosecution

      of an infringement claim by the holder of a copyright.(39)

      The final assertion in support of the dual approach looked to the legislative history of the Copyright Act.(40) The problem with this assertion, however, was that there simply was no express legislative history on point--Congress had been silent regarding the application of section 505.(41) Recognizing this lack of explicit intent, Fantasy contended that most courts had adopted the dual standard.(42) Under the "principle of ratification," Congress could be presumed to have adopted this general view of the statute when it enacted the provision in question.(43) The Court's review of the lower court decisions as of the time of the enactment of the Copyright Act, though, demonstrated that no clear "dual standard" construction of the attorney's fees provision,(44) which could be said to have moved Congress, existed.(45)

      [W]hile it appears that the majority of lower courts exercised

      their discretion in awarding attorney's fees to prevailing

      defendants based on a finding of frivolousness or bad faith, not

      all courts expressly described the test in those terms. In fact,

      only...