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“Kirtsaeng v. John Wiley II”

Decision of the Supreme Court 16 June 2016 – Case No. 15-375
  • Kirtsaeng, DBA Bluechristine99 v. John Wiley & Sons, Inc. Copyright Act, 17 U.S.C. § 505
Decision • Copyright Law United States of America
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    Petitioner Supap Kirtsaeng, a citizen of Thailand, came to the United States 20 years ago to study math at Cornell University. He quickly figured out that respondent John Wiley & Sons, an academic publishing company, sold virtually identical English-language textbooks in the two countries – but for far less in Thailand than in the United States. Seeing a ripe opportunity for arbitrage, Kirtsaeng asked family and friends to buy the foreign editions in Thai bookstores and ship them to him in New York. He then resold the textbooks to American students, reimbursed his Thai suppliers, and pocketed a tidy profit. Wiley sued Kirtsaeng for copyright infringement, claiming that his activities violated its exclusive right to distribute the textbooks. … Kirtsaeng invoked the “first-sale doctrine” as a defense. … But Wiley contended that the first-sale doctrine did not apply when a book (like those Kirtsaeng sold) was manufactured abroad. At the time, courts were in conflict on that issue. … To settle the continuing conflict, this Court granted Kirtsaeng’s petition for certiorari and reversed the Second Circuit in a 6-to-3 decision, thus establishing that the first-sale doctrine allows the resale of foreign-made books, just as it does domestic ones. See Kirtsaeng v. John Wiley & Sons, Inc., 568 U. S. ___, ___ (2013) (slip op., at 3).

     
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    Returning victorious to the District Court, Kirtsaeng invoked §505 to seek more than $2 million in attorney’s fees from Wiley. Section 505 of the Copyright Act provides that a district court “may … award a reasonable attorney’s fee to the prevailing party.”

     
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    In Fogerty v. Fantasy, Inc., 510 US 517 (1994), this Court recognized the broad leeway §505 gives to district courts – but also established several principles and criteria to guide their decisions. … The statutory language, we stated, “clearly connotes discretion,” and eschews any “precise rule or formula” for awarding fees. Id., at 533, 534. Still, we established a pair of restrictions. First, a district court may not “award[] attorney’s fees as a matter of course”; rather, a court must make a more particularized, case-by-case assessment. Id., at 533. Second, a court may not treat prevailing plaintiffs and prevailing defendants any differently; defendants should be “encouraged to litigate [meritorious copyright defenses] to the same extent that plaintiffs are encouraged to litigate meritorious claims of infringement.” Id., at 527. In addition, we noted with approval “several nonexclusive factors” to inform a court’s fee-shifting decisions: “frivolousness, motivation, objective unreasonableness[,] and the need in particular circumstances to advance considerations of compensation and deterrence.” Id., at 534, no. 19. And we left open the possibility of providing further guidance in the future, in response to (and grounded on) lower courts’ evolving experience. …

     
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    As Fogerty explained, “copyright law ultimately serves the purpose of enriching the general public through access to creative works.” 510 US, at 527; see US Const., Art. I, §8, cl. 8 (“To promote the Progress of Science and useful Arts”). The statute achieves that end by striking a balance between two subsidiary aims: encouraging and rewarding authors’ creations while also enabling others to build on that work. See Fogerty, 510 US, at 526. Accordingly, fee awards under §505 should encourage the types of lawsuits that promote those purposes. … On that much, both parties agree. … The contested issue is whether giving substantial weight to the objective (un)reasonableness of a losing party’s litigating position – or, alternatively, to a lawsuit’s role in settling significant and uncertain legal issues – will predictably encourage such useful copyright litigation.

     
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    The objective-reasonableness approach that Wiley favors passes that test because it both encourages parties with strong legal positions to stand on their rights and deters those with weak ones from proceeding with litigation.

     
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    By contrast, Kirtsaeng’s proposal would not produce any sure benefits. We accept his premise that litigation of close cases can help ensure that “the boundaries of copyright law [are] demarcated as clearly as possible,” thus advancing the public interest in creative work. … But we cannot agree that fee-shifting will necessarily, or even usually, encourage parties to litigate those cases to judgment. … All of that said, objective reasonableness can be only an important factor in assessing fee applications – not the controlling one…. That means in any given case a court may award fees even though the losing party offered reasonable arguments (or, conversely, deny fees even though the losing party made unreasonable ones). For example, a court may order fee-shifting because of a party’s litigation misconduct, whatever the reasonableness of his claims or defenses. … Or a court may do so to deter repeated instances of copyright infringement or overaggressive assertions of copyright claims, again even if the losing position was reasonable in a particular case. … Although objective reasonableness carries significant weight, courts must view all the circumstances of a case on their own terms, in light of the Copyright Act’s essential goals.

     

Keywords

Copyright law Attorneys fees 

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Copyright information

© Max Planck Institute for Innovation and Competition, Munich 2016

Authors and Affiliations

  • Kirtsaeng, DBA Bluechristine99 v. John Wiley & Sons, Inc. Copyright Act, 17 U.S.C. § 505

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