Torrent Law Updates 2016 – Cobbler Nevada Attorney Fee Case [Oregon]
This blog discusses a recent case from Oregon Federal Court discussing how a Defendant MIGHT be able to recover their attorney fees in an Torrent illegal movie download case. Here is a citation to the case which you can find on the Federal Online Pacer – Case 3:15-cv-00866-SB. Plaintiff was represented by Crowell Law firm.
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Cobbler Nevada, LLC v. Thomas Gonzales
Here are some of the comments from the above referenced case [FINDINGS AND RECOMENDATION]:
“This is an action alleging violations of the Copyright Act, 17 U.S.C. §§ 101 et seq., based on the alleged unlawful downloading and distribution of Plaintiff's copyrighted motion picture, The Cobbler, using BitTorrent peer-to-peer file sharing software. Plaintiff initially asserted two claims against Thomas Gonzales (“Gonzales”), direct copyright infringement and contributory copyright infringement“
“The Court granted Gonzales' motion to dismiss Plaintiff's contributory infringement claim, with prejudice. The Court also dismissed Plaintiff's direct infringement. Plaintiff clarified that the claim entitled “indirect infringement” was based on a theory of contributory infringement. Plaintiff failed to allege sufficient facts to state a claim against Gonzales. Thereafter, Plaintiff filed a notice of voluntary dismissal. Gonzales has filed a motion for an award of costs and attorney's fees. Specifically, Gonzales seeks $264.60 in costs and $17,222.40 in attorney's fees, for successfully defending Plaintiff's contributory infringement claim. Gonzales also asks the Court to enter judgment, dismissing Plaintiff's claims with prejudice. Plaintiff opposes Gonzales' motion, primarily on the ground that Gonzales is not a prevailing party under the Copyright Act.”
“On May 20, 2015, Plaintiff filed a Complaint against a Doe defendant identified only by an Internet Protocol (“IP”) address. Plaintiff's investigators observed the IP address distributing Plaintiff's motion picture over the publicly-available BitTorrent network. On the same day, Plaintiff filed a motion seeking leave to expedite discovery and to issue a subpoena to Internet Service Provider (“ISP”) Comcast, for information identifying the IP address subscriber. The Court granted Plaintiff's motion, and Plaintiff served a subpoena on Comcast. Comcast returned a subpoena response identifying Thomas Gonzales as the IP address subscriber. Plaintiff deposed Gonzales, and concluded, “it does not appear that he is a regular occupant of the residence or the likely infringer.”
“The infringement allegedly took place at an adult group care home, and Gonzales would not provide Plaintiff with details about the identity of the residents of the home, citing confidentiality.”
“Despite having acknowledged that Gonzales is not the likely infringer, Plaintiff filed a First Amended Complaint on November 4, 2015, naming Gonzales as the defendant. Plaintiff alleged that Gonzales was the subscriber originally identified as the Doe IP address, and that Gonzales copied and distributed The Cobbler through the BitTorrent network, in violation of Plaintiff's exclusive rights under the Copyright Act. Plaintiff alternatively alleged that Gonzales facilitated and permitted the use of the Internet for the infringing of Plaintiff's exclusive rights under the Copyright Act, by failing to secure, police, and protect the use of his Internet service.”
The Courts Ruling
“Plaintiff obtained no relief in this action, and Gonzales achieved dismissal of the case against him in its entirety, including dismissal of the contributory infringement claim with prejudice. The Court finds that Gonzales is the prevailing party. Cf. Milton H. Greene Archives, Inc. v. Julien's Auction House, LLC, No. CF 05-7686 AHM (FMOx), (E.D. Cal. Dec. 20, 2007) (holding that defendant was entitled to attorney's fees in copyright action, where defendant prevailed on secondary copyright claims and plaintiffs prevailed on direct copyright claims but were awarded no damages); Florentine Art Studio, Inc. v. Vedet K. Corp., 891 F. Supp. 532, 542 (C.D. Cal. Jan. 4, 1995)”
“The Supreme Court recently reiterated, in a unanimous decision, that “§ 505 grants courts wide latitude to award attorney's fees based on a totality of circumstances in a case.” See Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979, 1985 (2016). The Supreme Court emphasized that “§ 505 confers broad discretion on district courts and, in deciding whether to fee-shift, they must take into account a range of considerations beyond the reasonableness of litigating positions.” Kirtsaeng, 136 S. Ct. at 1988.
The Supreme Court has identified “several nonexclusive factors to guide courts' discretion,” including “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 534 n.19 (citation and quotation marks omitted). In Kirtsaeng, the Supreme Court noted that a court may also consider the need to “deter overaggressive assertions of copyright claims” 136 S. Ct. at 1989.
In Torrent download cases the federal courts will consider the reasonableness of the litigation
Here are some other factors the court discussed:
“This Court has already highlighted its concerns with the litigation strategy pursued by Plaintiff and other plaintiff LLCs in the hundreds of BitTorrent cases filed in this district. See, e.g., Cobbler Nevada, LLC v. Anonymous Users of Popcorn Time, No. 3:15-cv-01550-SB, 2016 (D. Or. Aug. 10, 2016) (denying plaintiff's fee motion, and noting that “the threat of fee-shifting has emboldened Plaintiff's counsel to demand thousands of dollars to settle a claim, even where the infringing defendant admits early in the case that they illegally downloaded the movie”); Glacier Films, Inc. v. Turchin, No. 3:15-cv-01817-SB (D. Or. Aug. 10, 2016) (same). At least one other judge in this district has also expressed concerns about the motivation driving some of these cases. See Countryman Nevada, LLC v. DOE (finding that Plaintiff's counsel had “conducted litigation in a manner calculated to increase the opposing party's costs—and, at the same time, to increase the bases for his own fee petition.”
Other cases cited that awarded a Defendant Attorney Fees in a wrongful copyright infringement case:
The case cited above also provided some additional legal precedence:
See generally Omega S.A. v. Costco Wholesale Corp., 776 F.3d 692, 696 (9th Cir.), cert. dismissed, 136 S. Ct. 445 (2015) (affirming district court's award of $396,844.17 to defendant in a first sale copyright dispute); Johnson v. Storix, Inc. (S.D. Cal. Aug. 17, 2016) (awarding defendant fees even when plaintiff's copyright case was non-frivolous); City of Inglewood v. Teixeira, No. (C.D. Cal. Oct. 8, 2015) (awarding prevailing defendant's pro bono counsel $117,741 for defending an objectively unreasonable claim); Lewis v. Activision Blizzard, Inc., No. C 12-1096 CW, 2014 (N.D. Cal. Sept. 25, 2014) (finding $152,104.50 reasonably expended by defendant on an objectively unreasonable copyright claim, but reducing the award in view of plaintiff's relative poverty); Atl. Recording Corp. v. Andersen, No. CV 05-933 AC, 2008 (D. Or. June 24, 2008) (awarding $103,175 to a prevailing defendant in an Internet file sharing copyright case).
Footnote 4 to the decision discussed Malibu Media torrent download cases
Malibu Media is a prolific filer of federal copyright infringement lawsuits. The Cobbler Nevada court took the opportunity to note this for the record:
See also Malibu Media, LLC v. Doe IP Address 220.127.116.11, No. 15 Civ. 4369 (AKH) (S.D.N.Y. July 6, 2015) (“Recent empirical studies show that the field of copyright litigation is increasingly being overtaken by ‘copyright trolls,' roughly defined as plaintiffs who are ‘more focused on the business of litigation than on selling a product or service or licensing their [copyrights] to third parties to sell a product or service. The paradigmatic troll plays a numbers game in which it targets hundreds or thousands of defendants, seeking quick settlements priced just low enough that it is less expensive for the defendant to pay the troll rather than defend the claim”).
F.R.C.P. Rule 12(b) Motions to Dismiss
A motion to dismiss is one option a BitTorrent defendant has when faced with a copyright infringement lawsuit. There are certain grounds that allow the Defendant to file a motion to dismiss (as opposed to racing to file an ANSWER). Here are the grounds per FRCP RULE 12(b):
(b) How to Present Defenses.
Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion:
(1) lack of subject-matter jurisdiction;
(2) lack of personal jurisdiction;
(3) improper venue;
(4) insufficient process;
(5) insufficient service of process;
(6) failure to state a claim upon which relief can be granted;
(7) failure to join a party under Rule 19.
A motion asserting any of these defenses must be made before pleading if a responsive pleading is allowed. If a pleading sets out a claim for relief that does not require a responsive pleading, an opposing party may assert at trial any defense to that claim. No defense or objection is waived by joining it with one or more other defenses or objections in a responsive pleading or in a motion.
This is what the Defendant filed in this case.
Award of Attorney Fees in Federal Court
The Oregon district Court discussed the issue of awarding attorney fees to a prevailing Defendant in a copyright lawsuit:
“The Copyright Act provides that attorney fee awards in copyright cases are discretionary: In any civil action under this title, a court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except 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.”
The Supreme Court has held that the district court may exercise its discretion to grant or deny attorney's fees to a prevailing party in a copyright case. See Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994) “Attorney's fees are to be awarded to prevailing parties only as a matter of the court's discretion.”). The parties dispute whether Gonzales is the prevailing party in this litigation. A “prevailing party” is the beneficiary of a “judicially sanctioned change in the legal relationship of the parties.”
“A plaintiff's dismissal of a claim does not automatically “confer prevailing party status upon the defendant,” if the defendant remains at risk of plaintiff re-filing the claim. Oscar v. Alaska Dep't of Educ. & Early Dev., 541 F.3d 978, 982 (9th Cir. 2008). However, if a plaintiff is unable to re-file the dismissed claim in federal court, the defendant is the “prevailing party” on that claim. See Miles v. California, 320 F.3d 986, 989 (9th Cir. 2003).
Takeways from the Cobbler Nevada case
If a Plaintiff cannot make its case for illegal movie downloads (for example, if the Defendant can show that it was not responsible for the illegal download alleged through the torrent website), or can show that there was unsecure wifi access, or that they were not located in the vicinity at the time of the alleged download (ex. piecing together credit card receipts to show a trail of travel away from the location of the I.P. address), and if following a deposition establishing these facts the Plaintiff seeks to “bow out” of the litigation, they MIGHT be held liable to pay the Attorney Fees of the prevailing Defendant. As you can see above, this is not an insubstantial amount.
Contact a IP litigation law firm
Our law firm can help Torrent Defendants in federal copyright litigation cases. If you received a notice of subpoena from your ISP, or were recently served a summons and complaint, contact to discuss your case with a litigation attorney familiar with these cases. Call us at (877) 276-5084. We do not charge litigants for the initial call.