International Media Films, Inc. v. Lucas Entertainment, Inc. et al

Filing 91

MEMORANDUM OPINION AND ORDER: For all of the reasons explained above, the defendants' application for attorney's fees and costs is denied. However, it should be noted that in the papers submitted, the defendants point to the fact that they submitted an Offer of Judgment pursuant to Rule 68 of the Federal Rules of Civil Procedure on July 5, 2007, which was plainly not accepted. The defendants may therefore be entitled to subsequently incurred costs under Federal Rule of Civil Procedure 68(d), although the defendants have not moved for such costs on this motion. Therefore, the denial of the current motion is without prejudice to any application under Rule 68. (Signed by Judge John G. Koeltl on 11/21/2011) (mro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
INTERNATIONAL MEDIA FILMS, INC.,
Plaintiff,
- against -

07 Civ. 1178 (JGK)
MEMORANDUM OPINION AND
ORDER

LUCAS ENTERTAINMENT, INC., ET AL.,
Defendants.
────────────────────────────────────
JOHN G. KOELTL, District Judge:
The defendants have moved for an award of attorney’s fees
and expenses against the plaintiff and its prior attorneys.
This Court has previously granted summary judgment dismissing
the plaintiff’s copyright and trademark claims and declining to
exercise supplemental jurisdiction over the plaintiff’s state
law claims.

The Court found that the plaintiff had failed to

adduce sufficient admissible evidence that it owned the
copyright to the film La Dolce Vita that it claimed was
infringed, and that the plaintiff had failed to establish
standing to assert its trademark infringement claim.
The defendants argue that the plaintiff and its lawyers
“must have or should have become aware that it was not
objectively reasonable to continue pursuing Plaintiff’s claims.”
(Reply Mem. at 1.)

However, the defendants have failed to show

that the plaintiff and its attorneys pursued this litigation in
bad faith.

Rather, the plaintiff’s attorneys made a good faith

effort at the outset to determine the basis for the plaintiff’s
chain of title and had some support for their conclusion that
the plaintiff did have good title.

The plaintiff argues that it

was clear that good title rested with Paramount, but this Court
never resolved that Paramount did have good title, and indeed
Paramount had not sued the plaintiff for copyright infringement
while the litigation was pending.

While this Court eventually

determined on summary judgment that there was insufficient
admissible evidence to establish the plaintiff’s copyright to La
Dolce Vita, that is not the equivalent of a finding that the
case was pursued in bad faith or with no colorable basis.
The defendants rely on the inherent power of the Court to
award sanctions including attorney’s fees against opposing
counsel.

See Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991);

Schlaifer Nance & Co. Estate of Warhol, 194 F.3d 323, 336 (2d
Cir. 1999).

However, the plaintiff has failed to show that

there was no colorable basis for the action or that it was
brought or pursued in bad faith.

The plaintiff also points to

Rule 11 of the Federal Rules of Civil Procedure, although it is
not clear that the motion is explicitly made pursuant to Rule
11.

In any event, the defendants have failed to establish a

violation of Rule 11.
The defendants also seek sanctions under Section 35 of the
Lanham Act, 15 U.S.C. § 1117(a)(3) which permits fees to be

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imposed in “exceptional cases.”

However, this provision should

only be applied when there is a showing of fraud or bad faith,
see Twin Peaks Prods., Inc. v. Publ’ns Int’l, Ltd., 996 F.2d
1366, 1383 (2d Cir. 1993), including where the plaintiff
presents forged documents in the course of the litigation.

See

Patsy’s Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 221
(2d Cir. 2003).

This is not such a case because there is no

showing that the plaintiff or its attorneys proceeded in bad
faith or were aware of the use of forged documents.

It should

be noted that in connection with the motion for summary
judgment, the Court found that the plaintiff could not prove its
chain of title because of its inability to produce the original
of a document critical to the chain of title, and there were
serious questions raised with respect to the authenticity of
several documents.

It was unnecessary for the Court to find

that any of the documents were actually fraudulent, only that
the plaintiff had not produced sufficient admissible evidence to
establish its claim of title.

There is no evidence that the

plaintiff or its lawyers were responsible for any of the
questionable documents or that they proceeded in bad faith.
Indeed, after reviewing the plaintiff’s showing of due
diligence, the defendants have retreated to the position that
the plaintiff and its lawyers “must have or should have become
aware that it was not objectively reasonable to continue

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pursuing Plaintiff’s claims.”

(Reply Mem. at 1.)

This

negligence standard is a far cry from the required showing of
bad faith or the knowing use of forged documents.
The Court has the discretion to award attorney’s fees to
the prevailing party in a copyright case.

17 U.S.C. § 515; see

Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994); Knitwaves,
Inc. v. Lollytogs Ltd., 71 F.3d 996, 1011 (2d Cir. 1995).

The

Supreme Court has explained that the factors to be considered in
exercising the court’s discretion are “frivolousness,
motivation, objective unreasonableness (both in the factual and
in the legal components of the case) and the need in particular
circumstances to advance considerations of compensation and
deterrence.”

Fogerty, 510 U.S. at 535 n.19 (internal citations

and quotation marks omitted).

In this case, the Court could not

find that the plaintiff’s copyright claim was frivolous or
objectively unreasonable, even though it did not succeed.

Lack

of success is not the equivalent of frivolousness or objective
unreasonableness.

Moreover, there is no evidence that the

lawsuit was brought for an improper purpose.

Finally, there is

no reason that parties with copyright claims should be deterred
from bringing such claims simply because they are eventually
unsuccessful.
In its papers, the defendants argue that the plaintiff
abused discovery in the course of the case.

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The plaintiff

responds that it was the defendants who abused discovery.

Each

of the parties had the opportunity to seek sanctions in the
course of the litigation and neither side points to such
sanctions.

The mutual recriminations do not advance either

side's position at this point in the litigation.
For all of the reasons explained above, the defendants'
application for attorney's fees and costs is denied.

However,

it should be noted that in the papers submitted, the defendants
point to the fact that they submitted an Offer of Judgment
pursuant to Rule 68 of the Federal Rules of Civil Procedure on
July 5, 2007, which was plainly not accepted.

The defendants

may therefore be entitled to subsequently incurred costs under
Federal Rule of Civil Procedure 68(d), although the defendants
have not moved for such costs on this motion.

Therefore, the

denial of the current motion is without prejudice to any
application under Rule 68.
SO ORDERED.
Dated:

New York, New York
November)!, 2011
hn G. Koeltl

ates District Judge

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