Under A Foot Plant, Co. v. Exterior Design, Inc., et al

Filing 153

MEMORANDUM AND ORDER denying 123 Plaintiff's Motion for Attorney Fees. Signed by Magistrate Judge Beth P. Gesner on 8/31/2017. (bmhs, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
*
UNDER A FOOT PLANT, CO.,
*
Plaintiff,
*
v.

Civil No.: BPG-15-871
*

EXTERIOR DESIGN, INC.,
*
Defendant.
*
*

*

*

*

*

*

*

*

*

*

*

*

*

*

MEMORANDUM AND ORDER
In this copyright infringement action, a jury found that defendant infringed plaintiff’s
copyrighted plant photographs and awarded plaintiff actual and statutory damages. Currently
pending before the court is: (1) Plaintiff’s Motion for Award of Attorneys’ Fees and Costs
(“Plaintiff’s Motion”) (ECF No. 123); 1 (2) Defendant’s Opposition to Plaintiff’s Motion
(“Defendant’s Opposition”) (ECF No. 147); and (3) Plaintiff’s Reply in Support of Its Motion
(“Plaintiff’s Reply”) (ECF No. 149). The issues are fully briefed, and no hearing is necessary.
Loc. R. 105.6. For the reasons stated below, Plaintiff’s Motion (ECF No. 123) is DENIED.

I.

BACKGROUND
The facts and procedural history of this case are set forth in Under A Foot Plant, Co. v.

Exterior Design, Inc., No. BPG-15-871, 2016 WL 4555021 (D. Md. Sept. 1, 2016) (ECF No.
65), and in this court’s memorandum and order denying defendant’s renewed motion for
judgment as a matter of law, or alternatively, for a new trial (ECF No. 150). In brief, plaintiff
1

Plaintiff filed a supplemental memorandum in support of its motion (ECF No. 143), pursuant to Local Rule 109.2.

brought suit under section 501 of the Copyright Act, see 17 U.S.C. § 501, alleging that
defendant, a wholesale nursery, infringed plaintiff’s copyrights in certain photographic plant
images by using them in its marketing materials without permission. On May 11, 2017, a jury
returned a verdict awarding plaintiff $900,000 in actual damages and $300,000 in statutory
damages for defendant’s infringements of twenty-three of plaintiff’s copyrighted plant images.
Plaintiff subsequently elected actual damages pursuant to 17 U.S.C. § 504(c)(1), and moved for
costs and attorneys’ fees under 17 U.S.C. § 505.

On August 18, 2017, this court denied

defendant’s renewed motion for judgment as a matter of law or for a new trial. Plaintiff’s
Motion is now fully ripe for review.

II.

DISCUSSION
The Copyright Act (the “Act”) provides that in any copyright infringement action, “the

court in its discretion may allow the recovery of full costs by or against any party,” and,
“[e]xcept 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.” 17 U.S.C. § 505. One such exception is found in
section 412 of the Act, which states that “no award of . . . attorney’s fees . . . shall be made for . .
. any infringement of copyright commenced after first publication of the work and before the
effective date of its registration.” Id. § 412. Thus, registration of the copyrighted work prior to
infringement is a prerequisite to the recovery of attorneys’ fees, but not to the recovery of other
costs. See id.
An award of attorneys’ fees lies solely within “the sound discretion of the trial court.”
Rosciszewski v. Arete Assocs., Inc., 1 F.3d 225, 234 (4th Cir. 1993). In deciding whether to
award fees to a prevailing party, the Fourth Circuit has instructed district courts to consider: “(1)

2

the motivation of the parties; (2) the objective reasonableness of the legal and factual positions
advanced; (3) the need in particular circumstances to advance considerations of compensation
and deterrence; and (4) any other relevant factor presented.” Superior Form Builders, Inc. v.
Dan Chase Taxidermy Supply Co., Inc., 74 F.3d 488, 498 (4th Cir. 1996) (citing Rosciszewski, 1
F.3d at 234). A district court may not award attorneys’ fees in a copyright case as a matter of
course; rather, the court must make a particularized, case-by-case determination based on the
totality of circumstances. Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979, 1985 (2016).
A. Attorneys’ Fees
In its Motion, plaintiff seeks attorneys’ fees in the amount of $557,317.97. (ECF No. 143
at 16.) Plaintiff argues that the jury’s award of maximum statutory damages for willful copyright
infringement, combined with defendant’s “myriad pretrial litigation failures” entitles plaintiff to
all of its fees. (ECF No. 123 at 2.) Defendant makes two arguments in opposition to Plaintiff’s
Motion. First, defendant argues that plaintiff is statutorily barred from recovering the bulk of its
fees because only two of the twenty-three images at issue were registered prior to the first act of
infringement. 2 (ECF No. 147 at 1–5); see 17 U.S.C. § 412(2). Second, defendant argues that it
advanced non-frivolous and meritorious defenses, 3 and thus the factors outlined in Rosciszewski
do not support an award of fees under the circumstances of this case. (ECF No. 147 at 5–9.)
After careful balancing of the factors set forth in Rosciszewski, the court concludes that
an award of attorneys’ fees is not warranted in this case. Regarding the first factor, the court
notes that plaintiff has not alleged that defendant proceeded in bad faith or engaged in
2

The two images were registered in 2005 as part of two compilation works, plaintiff’s Good For Your Sole brochure
and STEPABLES® website (collectively, the “2005 Works”), prior to the first allegedly infringing acts in 2011.
(ECF No. 147 at 1–2); see Pl. Exhs. 41, 42. The other twenty-one photographs were individually registered in 2014.
(ECF No. 147 at 2); see Pl. Exhs. 20–40c.
3
Defendant argues that several of its defenses were in fact successful, resulting in the dismissal of plaintiff’s state
law claims for unjust enrichment and unfair competition, and limiting the availability of statutory damages to two
separate awards for each of the 2005 Works. (ECF No. 147 at 7.)

3

misconduct. 4 Rather, plaintiff argues that the jury’s finding of “maximum willfulness was
reasonable,” given that defendant was aware of its infringements but took no action to avoid
future infringement. (ECF No. 123 at 3.) The court is not persuaded by plaintiff’s argument for
two reasons. First, the jury was only instructed to consider willfulness in determining statutory
damages, 5 which were only available for infringement of the registered 2005 Works. (See Tr.
Vol. 4, ECF No. 122 at 25); 17 U.S.C. § 412(2). Only seven of the twenty-three images that
went to the jury, however, were alleged to have been copied from the 2005 Works. (See ECF
No. 122 at 24.) Therefore, the court cannot assume that the jury found that defendant willfully
infringed all twenty-three images, particularly considering that the jury exercised its discretion to
reduce plaintiff’s actual damages award by one to two-thirds of what plaintiff requested. 6
Second, defendant offered evidence at trial rebutting plaintiff’s allegations that
defendant’s infringements were “reckless” (ECF No. 123 at 3).

For example, all three of

defendant’s witnesses testified to engaging in an ongoing dialogue with plaintiff about the nature
and extent of the alleged infringement, as well as defendant’s attempts to remove the infringing
images from its marketing materials. (See, e.g., ECF No. 120 at 219–21; Tr. Vol. 3, ECF No.
121 at 23–25, 92–97.) Although the jury found for plaintiff on the issue of willfulness (limited,
as it was, to the 2005 Works), the court nonetheless concludes that defendant’s arguments were
reasonable and its evidence not insubstantial, such that a consideration of the parties’ motivations
in pursuing their respective claims and defenses does not weigh in favor of plaintiff. See
4

Although plaintiff makes no explicit reference to bad faith, plaintiff alleges in its Reply that “[d]efendant failed,
despite appropriate hold letters and requests, to produce copies of its marketing materials and websites for review.”
(ECF No. 149 at 11.) At no point, however, did plaintiff file a motion to compel or otherwise notify the court of any
discovery dispute. Without the benefit of prior briefing on this issue, the court cannot determine whether defendant
failed to meet its discovery obligations, or otherwise engaged in litigation misconduct.
5

See 17 U.S.C. § 504(c)(2) (“In a case where . . . the court finds[] that infringement was committed willfully, the
court in its discretion may increase the award of statutory damages to a sum of not more than $150,000.”).
6

Professor Sedlik estimated actual damages at between approximately $1.5 and $3 million. (See Tr. Vol. 2, ECF
No. 120 at 159–60.)

4

Rosciszewski, 1 F.3d at 234 (“While a finding of willful infringement or bad faith on the part of
the opposing party properly may be considered by the district court, the presence or absence of
such motivation is not necessarily dispositive.”).
Turning to the second factor, the court has already noted the objective reasonableness of
defendant’s position with respect to willful infringement, and the court concludes that
defendant’s positions on liability and damages were similarly meritorious. Defendant challenged
the evidentiary sufficiency of its access to the registered 2005 Works, and advanced a colorable
theory that plaintiff was significantly overstating the fair market value of its images. 7 Although
the jury was more persuaded by the testimony of plaintiff’s witnesses, the objective
reasonableness of a claim or defense does not depend on its success or failure—otherwise fees
would be awarded as a matter of course. See Robinson v. New Line Cinema Corp., 57 F. Supp.
2d 211, 218 (D. Md. 1999) (“Although [the court] granted summary judgment in favor of
defendants, this does not equate to a conclusion that [plaintiff’s] claims are objectively
unreasonable.”); Kirtsaeng, 136 S. Ct. at 1988 (cautioning courts not to conflate the questions of
“whether a defendant in fact infringed a copyright and whether he made serious arguments in
defense of his conduct”).
Plaintiff contends that defendant “refused to meaningfully engage in resolving pretrial
issues,” and “deferred virtually every relevant legal question until the trial . . . was already
underway.” (ECF No. 123 at 4–5.) Plaintiff exhaustively enumerates defendant’s various
litigation missteps, including defendant’s failure to produce Rule 26 compliant expert reports, its
ill-timed “best evidence” objections, and its Daubert challenge to Professor Sedlik’s testimony

7

In support of its damages theory, defendant offered evidence at trial—both through its own witnesses and on crossexamination—that nonexclusive, royalty-free licenses for similar images were readily available at a fraction of the
fees advanced by Professor Sedlik, and that plaintiff had previously offered such a license to its authorized dealers.
(See ECF No. 120 at 47–48, 163–65; ECF No. 121 at 98–99.)

5

raised as a Rule 50 motion. (See id.; ECF No. 149 at 11.) While it is true that the court ruled
largely (though not entirely) in plaintiff’s favor on these issues, plaintiff’s arguments are really
directed to the effectiveness of defendant’s trial strategy, not the objective reasonableness of its
positions.8 Indeed, the court observed on more than one occasion that it would have benefitted
from full briefing on the substantive matters raised by defendant. (See, e.g., ECF No. 121 at
227–28.) While some of defendant’s arguments could have been more effectively presented, the
court cannot conclude that defendant advanced objectively unreasonable positions.

See

Kirtsaeng, 136 S. Ct. at 1987 (“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.”).
Considering the third factor, an award of fees to plaintiff would do little to advance the
compensation and deterrence goals of the Copyright Act. In this case, plaintiff has successfully
vindicated the public interest in protecting copyrighted works by securing substantial damages
and a permanent injunction against defendant. 9 See Lowry’s Reports, Inc. v. Legg Mason, Inc.,
302 F. Supp. 2d 455, 463 (D. Md. 2004) (“Although attorneys’ fees are appropriate when a
plaintiff successfully litigates an important right but receives only nominal damages, [plaintiff]
vindicated the public’s interest and secured a significant damages award.”); cf. Kirtsaeng, 136 S.
Ct. at 1986 (noting that fee-shifting ensures that “[t]he holder of a copyright that has obviously
been infringed has good reason to bring and maintain a suit even if the damages at stake are
small.”). Moreover, plaintiff’s perplexing attempt to distinguish Lowry’s Reports by arguing

8

Plaintiff also contends that defendant’s belated trial objections led to increased litigation costs, (ECF No. 123 at 5),
but the opposite is more likely true. For example, plaintiff would have incurred greater fees had defendant’s
Daubert motion been timely raised, as the parties would have fully briefed the issue.
9
Indeed, defendant consented to the court’s entry of a permanent injunction, which enjoins defendant from all future
infringement, and requires defendant to instruct third parties in possession of its marketing materials to cease all use
and discard all infringing materials. (See ECF No. 136 at 3–4.)

6

that only a substantial statutory damages award can deter would-be infringers is not persuasive. 10
(See ECF No. 149 at 11–12.) Plaintiff may be correct that, like fee-shifting under section 505,
statutory damages serve to deter infringers by encouraging plaintiffs to bring otherwise
unprofitable suits. Naturally, however, an actual damages award that exceeds the maximum
allowable statutory damages serves that same purpose. Accordingly, the court concludes that
considerations of compensation and deterrence do not weigh in plaintiff’s favor.
Finally, Rosciszewski instructs the court to consider any other relevant factor presented.
In their pleadings, the parties accuse each other of taking an obstinate and unreasonable approach
to settlement negotiations. (See ECF No. 147 at 8; ECF No. 149 at 13.) As a preliminary matter,
the court is not convinced that the parties’ settlement discussions—which are typically
confidential to encourage candid negotiations—are relevant to the inquiry before it.

See

Diamond Star Bldg. Corp. v. Freed, 30 F.3d 503, 506–07 (4th Cir. 1994) (finding lower court
abused its discretion to deny fees by considering prevailing defendant’s refusal to settle);
Robinson, 57 F. Supp. 2d at 219 n.3 (declining to weigh argument concerning unreasonableness
of plaintiff’s settlement offer).

The court nonetheless observes that defendant’s settlement

posture is not unusual, given plaintiff’s demand for a six-figure offer as a precondition to
participating in a second, court-supervised mediation. (See ECF No. 147 at 8; ECF No. 147-1 at
4.) Indeed, this court’s experience in mediating cases is that this type of demand often derails
settlement discussions. Accordingly, the court gives no weight to the parties’ settlement conduct
in evaluating Plaintiff’s Motion.
Defendant also contends that plaintiff is statutorily barred from recovering fees
attributable to those images registered after infringement commenced. Because fees are not
10

According to plaintiff, “[i]n Lowry’s Reports, attorneys’ fees were found to be unnecessary for deterrence
purposes, because the statutory damages in that case were significantly higher than the actual damages.” (ECF No.
149 at 11.)

7

warranted in this case, however, the court need not address this issue. 11 As plaintiff has not
raised any additional factors for consideration, and after a thorough weighing of the factors
discussed above, the court exercises its discretion to deny plaintiff’s motion for attorneys’ fees.
B. Expert Witness Costs
In addition to attorneys’ fees, plaintiff also seeks reimbursement for the costs of retaining
its damages expert, Professor Jeffrey Sedlik, for a total sum of $148,376.65. (ECF No. 143 at 7–
10.) Plaintiff argues that it is entitled to recover these costs because Professor Sedlik’s testimony
was essential to the success of its case. (Id. at 8–9.) Although the Copyright Act permits the
recovery of “full costs,” there is a split of authority on whether this provision is limited by 28
U.S.C. §§ 1821(b), 1920, which cap taxable witness fees at $40 per day. See 4 Nimmer &
Nimmer, § 14.09. Plaintiff urges this court to follow the Ninth Circuit’s decision in Twentieth
Century Fox Film Corp. v. Entm’t Distrib., 429 F.3d 869 (9th Cir. 2005), in which the court
concluded that, by specifically authorizing the recovery of “full” costs, Congress empowered
“district courts . . . [to] award otherwise non-taxable costs, including those that lie outside the
scope of § 1920, under § 505.” Twentieth Century Fox, 429 F.3d at 885. Defendant contends
that the court should follow the Eighth and Eleventh Circuits, both of which have concluded that
section 505 does not “evinc[e] a clear congressional intent to supersede the limitations imposed
by § 1821.” Artisan Contractors Ass’n of Am., Inc. v. Frontier Ins. Co., 275 F.3d 1038, 1040
(11th Cir. 2001); accord Pinkham v. Camex, Inc., 84 F.3d 292, 295 (8th Cir. 1996).

11

Although the court has determined that fees are not warranted, the court nonetheless makes two observations
regarding the amount of fees requested by plaintiff. First, as plaintiff appears to acknowledge, section 412 of the
Act prohibits plaintiff from recovering any portion of its fees attributable solely to images registered after
infringement commenced. See 17 U.S.C. § 412. Given that twenty-one of the twenty-three images were not
registered prior to infringement, it is clear to this court that any fee award would have to be reduced by at least some
percentage to account for these untimely registrations. Second, the Copyright Act only authorizes an award of
reasonable attorneys’ fees, and, as a result, the fees sought by plaintiff, which are quite substantial, would be subject
to a review for reasonableness.

8

Although the court is persuaded by the reasoning of the Eighth and Eleventh Circuits, it
need not decide whether sections 1821 and 1920 limit the recovery of expert witness fees under
section 505 of the Copyright Act. For the reasons noted above with respect to attorneys’ fees,
the court concludes that an award of expert witness fees—in any amount—is not warranted in
this case.

See 4 Nimmer & Nimmer, § 14.09 (“As with the award of fees, an award of costs

typically is not made if there is no element of moral blame attributable to the party against whom
such costs are sought.” (footnotes omitted)). Accordingly, the court exercises its discretion to
deny plaintiff’s motion for costs incurred in retaining Professor Sedlik. 12

III.

CONCLUSION
For the foregoing reasons, Plaintiff’s Motion (ECF No. 123) is DENIED.

Date: August 31, 2017

__________/s/_______________
Beth P. Gesner
United States Magistrate Judge

12

This Order is without prejudice to plaintiff’s right to file a bill of costs with the Clerk of the Court pursuant to 28
U.S.C. § 1920.

9