John Wiley & Sons, Inc. v. Supap Kirtsaeng et al

Filing 153

OPINION AND ORDER....The defendants motion for an award of attorneys fees and costs is denied. The Clerk of Court shall close the case. (Signed by Judge Denise L. Cote on 12/21/2016) (gr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------- X
:
JOHN WILEY & SONS, INC.,
:
Plaintiff,
:
:
-v:
:
SUPAP KIRTSAENG,
:
:
Defendant.
:
:
-------------------------------------- X

08cv7834 (DLC)
OPINION AND ORDER

APPEARANCES:
For the Plaintiff:
Gary M. Rinck
John Wiley & Sons, Inc.
1111 River Street
Hoboken, NJ 07030-5774
For the Defendant:
Sam P. Israel
Eleonora Zlotnikova
Sam P. Israel, P.C.
180 Maiden Lane, 6th Floor
New York, NY 10038
DENISE COTE, District Judge:
John Wiley & Sons, Inc. (“Wiley”), a domestic publisher of
academic textbooks, brought this copyright action in 2008
against Supap Kirtsaeng (“Kirtsaeng”), an importer and reseller
of Wiley’s foreign edition textbooks, claiming that his
activities violated its exclusive right to distribute and import
the textbooks.

As the prevailing party, Kirtsaeng moves for an

award of attorneys’ fees.

For the following reasons, the motion

is denied.
BACKGROUND
This case is before the Court after its second trip to the
Supreme Court.

The district court found in 2009 that Kirtsaeng

had infringed on Wiley’s copyright, and the Second Circuit
affirmed, holding that “the District Court correctly decided
that Kirtsaeng could not avail himself of the first sale
doctrine codified by § 109(a) [of the Copyright Act] since all
the books in question were manufactured outside of the United
States.”

John Wiley & Sons, Inc. v. Kirtsaeng, 654 F.3d 210,

222 (2d Cir. 2011); see 17 U.S.C. § 109(a) (2006).

The Supreme

Court, however, reversed, holding that Kirtsaeng could invoke
the Copyright Act’s first sale doctrine as a defense to Wiley’s
copyright infringement claim.

Kirtsaeng v. John Wiley & Sons,

Inc., 133 S. Ct. 1351 (2013).
As the prevailing party, Kirtsaeng moved for an award of
attorneys’ fees under the Copyright Act’s fee-shifting
provision.

See 17 U.S.C. § 505.

denied Kirtsaeng’s application.

In 2013, the district court
John Wiley & Sons, Inc. v.

Kirtsaeng, No. 08cv07834 (DCP), 2013 WL 6722887, at *6 (S.D.N.Y.
Dec. 20, 2013).

The Second Circuit affirmed the denial of
2

attorneys’ fees, holding that the district court was correct to
place “substantial weight” on the objective reasonableness of
Wiley’s position and that the district court did not abuse its
discretion in determining that the other factors it considered
did not outweigh the reasonableness finding.

John Wiley & Sons,

Inc. v. Kirtsaeng, 605 F. App’x 48, 49-50 (2d Cir. 2015).
The Supreme Court vacated the Second Circuit’s decision,
noting that “the Court of Appeals’ language at times suggests
that a finding of reasonableness raises a presumption against
granting fees.”

Kirtsaeng v. John Wiley & Sons, Inc., 136 S.

Ct. 1979, 1989 (2016) (hereinafter “Kirtsaeng II”).

It remanded

the case to ensure that the district court would give
“substantial weight to the reasonableness of Wiley’s litigating
position, but also tak[e] into account all other relevant
factors.”

Id.

The Court, however, cautioned that it did “not

at all intimate that the District Court should reach a different
conclusion.”

Id.

On August 26, 2016, the Second Circuit issued

a mandate which vacated the judgment of the district court and
remanded for further proceedings consistent with the opinion of
the Supreme Court.

John Wiley & Sons v. Kirtsaeng, No. 14-344

(Aug. 29, 2016).

3

Kirtsaeng submitted an August 26 letter to the district
court requesting an opportunity to submit briefs consistent with
the analysis articulated in the recent Supreme Court decision.
The case was reassigned to this Court on October 26, 2016.

On

November 3, this Court ordered that “briefs from both parties
shall be served by December 9” in the form of either “a single,
previously submitted brief and an accompanying memorandum of no
more than five pages” or “a new brief no longer than twenty
pages without attachment.”

Having considered the December 9

submissions as well as the entire record in this case,
Kirtsaeng’s motion for attorneys’ fees is denied.
DISCUSSION
Section 505 of the Copyright Act provides that “the court
in its discretion may allow the recovery of full costs by or
against any party other than the United States” and that “the
court may also award a reasonable attorney’s fee to the
prevailing party as part of the costs.”

17 U.S.C. § 505.

“There is no precise rule or formula for making these
determinations, but instead equitable discretion should be
exercised . . . .”
(1994).

Fogerty v. Fantasy, Inc., 510 U.S. 517, 534

“[A] district court determining whether to exercise its

discretion to award fees under the Copyright Act may consider
4

such factors as (1) the frivolousness of the non-prevailing
party’s claims or defenses; (2) the party’s motivation; (3)
whether the claims or defenses were objectively unreasonable;
and (4) compensation and deterrence.”

16 Casa Duse, LLC v.

Merkin, 791 F.3d 247, 264 (2d Cir. 2015) (citation omitted).
The Supreme Court emphasized in Kirtsaeng II that courts
must make a “particularized, case-by-case assessment . . .
guided by sound legal principles” when addressing an attorneys’
fees motion.

136 S. Ct. at 1985-86.

It reminded courts that

they “may not treat prevailing plaintiffs and prevailing
defendants any differently.”

Id. at 1985.

It agreed with Wiley

that a court should give “substantial weight” to the objective
reasonableness or unreasonableness of the losing party’s
litigating position.

Id. at 1986-87.

It cautioned, however,

that a court may not “turn[ ] ‘substantial’ into more nearly
‘dispositive’ weight.”

Id. at 1989.

“Objective reasonableness

can be only an important factor in assessing the applications –not the controlling one.”

Id. at 1988.

Accordingly, courts

“must take into account a range of considerations beyond the
reasonableness of litigating positions.

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
5

losing party made unreasonable ones).”

Id. (citation omitted).

“[C]ourts must view all the circumstances of a case on their own
terms, in light of the Copyright Act’s essential goals.”

Id. at

1989.
Regarding the Copyright Act’s goals, Kirtsaeng II
acknowledged that
[t]hose objectives are well settled. As Fogerty
explained, “copyright law ultimately serves the
purpose of enriching the general public through access
to creative works.” 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.
Accordingly, fee awards under § 505 should encourage
the types of lawsuits that promote those purposes.
Id. at 1986 (citation omitted).
This litigation, looked at holistically and in light of the
Copyright Act’s goals, does not favor an award of attorneys’
fees to Kirtsaeng, even though he is indisputably the prevailing
party.

Wiley’s position, though ultimately unsuccessful, was

not objectively unreasonable.

As the district court noted in

its attorneys’ fees opinion, “Wiley’s claim -- which persuaded
this Court, the Court of Appeals, and three Justices of the
Supreme Court

--

represented the legitimate attempt of a

copyright holder to enforce its rights against the unauthorized
importation of low-priced, foreign-made copies of its
6

copyrighted works.”

John Wiley & Sons, Inc., 2013 WL 6722887,

at *2; see also John Wiley & Sons, Inc., 654 F.3d at 222 (“We
freely acknowledge that this is a particularly difficult
question of statutory construction in light of the ambiguous
language of § 109(a) . . .”).
While substantial weight should be given to the objective
reasonableness of Wiley’s litigating position, that
determination is only the beginning of the relevant inquiry.

It

is also necessary to examine whether other appropriately
considered factors suggest that in the circumstances of this
case, and in light of the Copyright Act’s goals, Kirtsaeng
should be awarded fees.

They do not.

Several relevant factors

weigh strongly against an award of fees.

For the same reasons

that Wiley’s litigating position was objectively reasonable, it
was not frivolous.

A complaint is frivolous “where it lacks an

arguable basis either in law or in fact.”
490 U.S. 319, 325 (1989).

Neitzke v. Williams,

Moreover, Wiley acted in good faith

to defend its distribution rights against what it reasonably
considered to be the unauthorized importation of its copyrighted
works.
In support of his request, Kirtsaeng makes a series of
interrelated arguments.

The most prominent themes in its motion
7

are described here.

None of its arguments, taken together or

singly, however, persuade this Court that he should be awarded
fees in this action.
Kirtsaing contends that Wiley’s litigation position was not
objectively reasonable in its entirety because its complaint
also asserted a trademark claim and an unfair competition claim.
Wiley withdrew one of these claims early in the litigation and
the other before trial.

Pleading and litigating these claims

for a period of time alongside the copyright claim did not make
Wiley’s litigating position objectively unreasonable. 1
Kirtsaeng argues that Wiley had an improper motive in
attempting to use the Copyright Act to assert downstream control
over the distribution of textbooks even after it profited from
the first sale.

This simply restates that Wiley’s copyright

claim was ultimately unsuccessful.

Wiley’s decision to file and

its pursuit of the copyright infringement action against one
whom it believed in good faith to have infringed its copyright
did not constitute either bad faith or suggest an impermissible

While Kirtsaeng’s current motion places great emphasis on the
pleading of the two collateral claims, his original brief of
August 1, 2013, filed before the court that supervised the
litigation to support the award of attorneys’ fees, gave scant
attention to the two claims. He described them as “quickly
aborted.” The 2013 brief focused almost exclusively on
arguments addressed to the copyright claim.
1

8

motive.

“[C]opyright law celebrates the profit motive,

recognizing that the incentive to profit from the exploitation
of copyrights will redound to the public benefit by resulting in
the proliferation of knowledge.”

Eldred v. Ashcroft, 537 U.S.

186, 212 n.18 (2003).
Kirtsaeng urges that he “obtained an extremely high degree
of success in litigating this close case,” which favors a fee
award.

But, to award attorneys’ fees because the first sale

doctrine was a complete defense to the infringement claim would
be to “confuse[ ] the issue of liability with that of
reasonableness.”

Kirtsaeng II, 136 S. Ct. at 1988.

Finally, Kirtsaeng argues that compensation is necessary to
“incentiviz[e] impecunious defendants to stand up to corporate
goliaths” and to reimburse the defendant and his attorneys.
a closer case for an award of attorneys’ fees, this argument
might have greater weight.

But, in the context of this

litigation, it is insufficient to merit an award.

9

In

CONCLUSION
The defendant’s motion for an award of attorneys’ fees and
costs is denied.
Dated:

The Clerk of Court shall close the case.

New York, New York
December 21, 2016
__________________________________
DENISE COTE
United States District Judge

10