Yesterday, the U.S. Supreme Court ruled in Kirtsaeng v. John Wiley & Sons, Inc., No. 15-375, that it is appropriate for a court to give substantial weight to the reasonableness of a losing party’s position when deciding whether to award attorney’s fees in a case brought under the Copyright Act as long as “all other relevant factors” are taken into account. In delivering this opinion for a unanimous Court, Justice Kagan essentially adopted a more flexible and expansive version of the approach advocated for by Wiley (the copyright owner), which primarily turned on whether a losing party’s arguments were objectively reasonable.
This case began more than 10 years ago, when Kirtsaeng, a citizen of Thailand, developed a successful business in which he obtained foreign-edition copies of English-language textbooks abroad below their U.S. market prices and resold them in the U.S. at a profit. Wiley sued Kirtsaeng for copyright infringement in 2008, alleging that Kirtsaeng violated Wiley’s exclusive rights in distributing its copyrighted works and in preventing unauthorized importation of its copyrighted works.
After Kirtsaeng lost at trial, the case ultimately reached the Supreme Court, which ruled in a 6-3 decision that Kirtsaeng’s actions did not constitute copyright infringement because Wiley’s exclusive rights in the textbooks that Kirtsaeng obtained abroad were exhausted under the “first sale” doctrine.1 In the three years that have passed since the Supreme Court’s previous ruling, the case has returned to the district court, where Kirtsaeng is now seeking an award of attorney’s fees from Wiley.
Under U.S. copyright laws, a “court may [...] award a reasonable attorney’s fee to the prevailing party as part of the costs.”2 The Supreme Court previously addressed this section of the copyright laws in Fogerty v. Fantasy Inc., 510 U.S. 517, 29 USPQ2d 1881 (1994). In Fogerty, the Court held that “[p]revailing plaintiffs and prevailing defendants are to be treated alike, but attorney’s fees are to be awarded to prevailing parties only as a matter of the court’s discretion.”3 The Court also discussed in Fogerty several “nonexclusive” factors that “may be used to guide courts’ discretion” in deciding whether to award attorney’s fees, “so long as such factors are faithful to the purposes of the Copyright Act and are applied to prevailing plaintiffs and defendants in an evenhanded manner.”4
In the proceedings below, both the district court and the Second Circuit denied Kirtsaeng’s bid for attorney’s fees. In doing so, they followed Second Circuit precedent that places “substantial weight” on the “objective reasonableness” factor — which asks whether the non-prevailing party’s claims were “objectively reasonable” — relative to the other factors discussed in Fogerty.5
The question presented to the Supreme Court in the current Kirtsaeng case — and addressed by yesterday’s opinion — is whether the lower courts’ rulings run afoul of the statutory text of the Copyright Act and the Supreme Court’s prior ruling in Fogerty by emphasizing the “objective reasonableness” factor over others when deciding whether to award attorney’s fees in a copyright infringement action.
In yesterday’s opinion, the Court held that it is appropriate for a court to give substantial weight to the reasonableness of a losing party’s position when deciding whether to award attorney’s fees as long as “all other relevant factors” are taken into account.6 Because it was not clear here whether the lower courts “understood the full scope of that discretion” since their opinions primarily focused on the “objective reasonableness” factor, the Court vacated the lower courts’ rulings in this case and remanded the case back to the district court to ensure that these “other” factors — in addition to reasonableness — are also considered.7
In setting forth this more flexible framework that gives greater discretion to district courts in deciding whether to award attorney’s fees in copyright cases, the Court emphasized that its approach will further the aims of the Copyright Act insofar as it will encourage “useful copyright litigation” and will be “more administrable” than other alternatives it considered.8 The Court also reaffirmed several aspects of its previous ruling in Fogerty. For example, quoting portions of Fogerty, the Court noted that fee awards must be decided on a case-by-case basis and cannot be awarded “as a matter of course.” It further noted that prevailing plaintiffs and prevailing defendants should not be treated differently when it comes to awarding fees.9
Overall, the Court’s decision here is consistent with its approach to awards of attorney’s fees in other types of intellectual property cases, including Monday’s ruling in Halo Electronics, Inc. v. Pulse Electronics, Inc., No. 14-1513, which concerned fee awards in patent cases. In particular, as in Halo, the Court’s decision in Kirtsaeng elevates the discretion of a trial court over hard and fast rules that would otherwise limit discretion in deciding issues related to fee awards.
Going forward, it may be more difficult for litigants to predict whether fees will be awarded in a particular case, because courts will have more discretion in taking additional considerations into account. While the opinion suggests that under this reasonableness-based approach to awarding fees, “[t]he copyright holder with no reasonable infringement claim has good reason not to bring suit in the first instance [...] and the infringer with no reasonable defense has every reason to give in quickly, before each side’s litigation costs mount,” it might not always be clear how reasonable one’s position really is or what circumstances will matter most to the court in deciding whether to award fees until after the case has been decided on the merits. As a result of this decision, parties contemplating or involved in copyright litigation may wish to closely consider the reasonableness of their positions at each stage of litigation and particularly early on before significant fees have been incurred.
In addition, although yesterday’s Kirtsaeng decision represents perhaps only a moderate expansion of the analytical framework previously used by courts in deciding whether to award attorney’s fees in copyright cases, it is possible that the Court’s ruling in this case will lead to more fee awards than the Court may expect. In particular, while the Court seems satisfied that this reasonableness test is relatively easy to administer, since “[a] district court that has ruled on the merits of a copyright case can easily assess whether the losing party advanced an unreasonable claim or defense,”10 it seems likely that a losing party’s position often will look less reasonable after the court has ruled against it on the merits, which is typically the point at which the court then considers whether to award attorney’s fees. Although the Court suggests that the “the issue of liability” should be separated from “that of reasonableness” in considering whether the losing party’s position was reasonable,11 it may be difficult to do this in practice, since the arguments advanced by each party will inevitably be intertwined with the facts upon which liability is determined.
While it remains to be seen how yesterday’s decision will affect copyright litigation going forward, the probable outcome of the Kirtsaeng case itself seems clearer. In particular, the case will be heading back to the district court for further consideration in view of the Court’s new framework. And significantly, in concluding its opinion, the Court notes that in sending the case back to the district court to “take another look” at Kirtsaeng’s fee application, “we do not at all intimate that the District Court should reach a different conclusion,” instead “we merely ensure that the court will evaluate the motion consistent with the analysis we have set out — giving substantial weight to the reasonableness of Wiley’s litigating position, but also taking into account all other factors.”12 While the district court may of course rule either way after considering these other factors, it seems likely — given these remarks by the Court — that the outcome in this case will remain the same as before, with Kirtsaeng’s bid for attorney’s fees being denied.
Please click here to read the opinion.
Please click here to download a printable version of this article.

1Kirtsaeng v. John Wiley & Sons Inc., 133 S. Ct. 1351, 568 US __, 106 USPQ2d 1001 (2013).
217 U.S.C. 505.
3Fogerty, 29 USPQ2d at 1888.
4See Fogerty, 29 USPQ2d at 1889, fn. 19.
5Specifically, the rulings below follow the Second Circuit’s decision in Matthew Bender & Co. v. West Publishing Co., 57 USPQ2d 1708 (2d Cir. 2001), which held that “objective reasonableness is a factor that should be given substantial weight in determining whether an award of attorneys’ fees is warranted.” Id. at 1712.
6See Slip Op. at 12.
7See Slip Op. at 1.
8See Slip Op. at 6-9.
9See Slip Op. at 4.
10See Slip Op. at 9.
11See Slip Op. at 10.
12See Slip Op. at 12.

This isn't video game related, but music copyright cases always interest me.  First, the details, from Law360:

New York (June 8, 2016, 8:14 PM ET) -- British singer Ed Sheeran violated U.S. copyright laws by basing a portion of his hit song "Photograph" on a chorus from another song without first obtaining permission, according to a complaint by two songwriters who seek at least $20 million in damages.
   Martin Harrington, Thomas Leonard and HaloSongs Inc. — a publishing company owned by Harrington — allege that the chorus sections of their song "Amazing" are substantially similar to the chorus in Sheeran's song, according to the complaint filed Wednesday in California federal court.
   The songwriters claim that Sheeran and John McDaid, the co-writer of "Photograph," had access to "Amazing" because a version of it was covered by Matt Cardle, the 2010 winner of the music competition show "The X Factor." Cardle's version of "Amazing" peaked at No. 84 on the U.K. singles chart and was widely played on various forms of media, according to the complaint.
Now, decide for yourself.  Here are links to the official YouTube videos for each, with positions to start listening to the relevant sections.

Amazing (starting around the 1:45 mark):

Photograph (starting around the 2:27 mark):

I can hear some similarities, but there are also differences.  Will be interesting to see what happens with this one.
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White Knuckle Gaming v. Electronic Arts
Case number 1:15-cv-00150
U.S. District Court for the District of Utah

Salt Lake City, Utah.  June 2, 2016.  U.S. District Judge Jill N. Parrish granted Electronic Arts Inc.’s motion to dismiss, saying that Utah-based White Knuckle Gaming LLC cannot sue for patent infringement because the patent at issue — which describes a method for updating sports videos games to reflect real-world changes like statistics, athlete appearances and uniforms — covers an abstract idea and does not include any additional elements that transform the claim into patent-eligible material.

“The patent claims do nothing more than recite the performance of a long-established business practice — rewriting software to produce an updated version — using a general purpose computer and the internet,” Judge Parrish wrote.

“It is a longstanding business practice in the video game industry to update sports video games parameters to reflect real-world developments,” Judge Parrish wrote.

According to Judge Parrish, the patent doesn’t have any additional elements that transforms the abstract idea into an inventive concept because it doesn’t rely on anything other than generic computer equipment in order to be accomplished.

“The court holds that the patent is drawn to a patent-ineligible abstract idea, and merely requiring generic computer implementation fails to transform that idea into a patent-eligible invention,” Judge Parrish wrote.

The patent-in-suit is U.S. Patent Number 8,540,575 titled “Method and System for Increased Realism in Video Games.”  One interesting thing about this case is the length of the claims that were invalidated.  For example, representative claim 1 reads:
1. A game medium configured to provide a sports video game in conjunction with a video game machine, the sports video game including video game rules and video game character parameters, the video game character parameters including video game character performance parameters associated with individual video game characters, the game medium being configured to cause the video game machine to perform a method comprising:
loading video game data stored by the game medium into a random access memory of the video game machine for playing the video game, the video game data including the video game rules and a particular video game character performance parameter associated with a particular individual video game character associated with a particular real-life sports athlete, wherein the particular video game performance parameter is based at least in part on a real-life performance of the particular real-life sports athlete playing in one or more real-life sporting events, the particular video game character performance parameter affecting the manner in which the particular individual video game character performs in the sports video game;
during a single sports season, receiving a series of updated video game character performance parameters from a data server via a network including the Internet, wherein each of the updated video game character performance parameters in the series is based at least in part on one or more different real-life performances of the particular real-life sports athlete in one or more sporting events performed during the single sports season; 
updating the sports video game with each of the updated video game character performance parameters received, wherein each update changes the manner in which the particular individual video game character performs in the sports video game such that the particular individual video game character more closely simulates real-life performance attributes of the particular real-life athlete in the sports video game; and 
enabling a user to control the particular individual video game character in the sports video game using a video game controller connected to the video game machine.
This is a case that will be closely and heavily scrutinized in the wake of Alice v. CLS Bank.  Many practitioners will use this case as more fodder to try to read the tea leaves in the winds of change that is Federal jurisprudence on patent-eligible subject matter.

White Knuckle Gaming will likely appeal.  Along with the McRO case currently pending at the Federal Circuit, this could be another pertinent case in the world of video game patents.
Atari Games Corp. v. Oman 
979 F. (2d) 242 (DC Cir. 1992)

This case dealt with the copyright status of video games, particularly whether video games are eligible for registration. Atari Games Corporation released the paddle and ball video game Breakout in 1976. Atari applied for copyright registration for the work in 1987. Copyright Registrar Ralph Oman denied registration on February 13, 1987, and again on May 22, 1987, because the work “did not contain at least a minimum amount of original pictorial or graphic authorship, or authorship in sounds.” Atari challenged Oman’s rejections.

The District Court granted summary judgment to Oman, noting that video games are not per se copyrightable, or more creative than other mediums. The Court of Appeals reversed the decision and held that Breakout was copyrightable because it is a fixed work that meets the minimum requirement for creativity in copyright.  This is a seminal case that helped establish the copyrightability of video games in general.

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