Attorneys Fees Under the Copyright Act? (Good Idea To Have A Contractual Right Also)

I've previously written about the litigation brought by Yellow Pages Photos ("YPP") against Ziplocal and Yellow Pages Group ("YPG").  YPP proceeded to trial against Ziplocal and YPG.  YPP next sought an award of its attorneys fees against Ziplocal.

At trial, the jury found that Ziplocal breached the End User License Agreement ("EULA") between Ziplocal and YPP.  That agreement provided:

In the event of legal action to enforce this agreement or in conjunction with the use of the product the prevailing party shall be entitled to recover its attorney's fees and costs, in addition to any other legal and equitable relief granted.

The jury also found that Ziplocal willfully infringed 123 copyrights belonging to YPP.  The jury awarded $100,000 as damages for Ziplocal's contributory copyright infringement and $1 in actual damages for copyright infringement.  The jury suggested zero dollars in statutory damages.

YPP requested its fees be awarded under both the EULA and the Copyright Act.  Concerning the EULA, the Court had no discretion to avoid an award:

Florida law considers attorney’s fee provisions contracts of indemnification. Lashkajani v. Lashkajani, 911 So.2d 1154, 1158 (Fla. 2005) (explaining purpose of provision is to “protect and indemnify” the interests of the parties, not to enrich prevailing party). A trial court may not exercise discretion to decline to enforce the provision. See North Am. Clearing, Inc. v. Brokerage Computer Sys., Inc., 395 F.App’x 563, 567 (11th  Cir. 2010) (unpublished opinion) (citing Lashkajani). 

Because the jury found against Ziplocal on all three claims submitted to it, YPP was the prevailing party, notwithstanding Ziplocal's success in warding off a significantly larger damage theory, including Ziplocal's ability to fend off any damages under the breach of EULA theory:

Ziplocal cites no persuasive authority for this proposition, and the Court finds no compelling circumstances that would warrant deeming Ziplocal the prevailing party. Florida courts have held that the party against whom a contract has been breached may be the prevailing party even though the jury awarded “$0” damages. See Khodam v. Escondido Homeowner’s Ass’n, 87 So.3d 65 (Fla.Dist.Ct.App. 2012); The Green Companies, Inc. v. Kendall Racquetball Investment, Ltd., 658 So. 2d 1119 (Fla.Dist.Ct.App. 1995). Accordingly, Yellow Pages Photos is entitled to attorney’s fees and costs pursuant to the EULA

Concerning the Copyright Act, the Court does have discretion to determine an award.  See 17 U.S.C. § 505. And the Court exercised its discretion:

Assuming that Plaintiff is the prevailing party, the Court declines to award attorney’s fees pursuant to the statute. Using the nonexclusive factors noted in Fogerty, as tempered by the purposes of the Copyright Act, an award of fees to either side would run afoul of any perceived even-handed approach. The jury’s verdict speaks for itself that Ziplocal committed both willful infringement and willful contributory infringement.  Nevertheless, the jury did not award a great amount of damages. While the Plaintiff vigorously and successfully defended its copyright, the damages sought based on the number of works at 10,200 far exceeded those actually recovered for the less than 200 works.  The disconnect between the damages sought and the damages awarded weigh heavily against an award of fees. The Court exercises its discretion to deny attorney’s fees under the Copyright Act in this very contentious case.

Motion to award fees granted in part, denied in part.

Yellow Pages Photos, Inc. v. Ziplocal, LP, Case No. 8:12-CV-755 (M.D. Fla. Oct. 31, 2014) (J. Lazzara)

Permanent Injunction For A Willful Copyright Infringer?

Nope.  Injunctions do not automatically flow after a finding of infringement, even where infringement is willful.  Yellow Pages Photos sued Ziplocal and Yellow Pages Group for unauthorized usage of YPP's photos.  YPP produces and licenses images for use in advertising.  Ziplocal was formerly a licensee of YPP and YPG created and produced advertisements for Ziplocal.

YPP prevailed at trial, convincing the jury that defendants had willfully infringed its copyrights.  Specifically, the jury awarded $100,001 against Ziplocal for breach of contract, willful copyright infringement of 123 works, and contributory copyright infringement of 123 works.  The jury also awarded $123,000 against YPG for willful copyright infringement of 123 works.  After the jury trial, YPP sought both prejudgment interest and a permanent injunction.

To obtain a permanent injunction, you must show: (1) irreparable harm; (2) damages do not adequately compensate you for the harm; (3) the balance of hardships justifies an injunction; and (4) the public interest is best served with an injunction.  Even though you've established willful infringement, you must still prove these four factors.  The problem for YPP was that it had testified that money was enough to compensate for its injury and that it hadn't made any new sales in years:

Looking at the factors of irreparable harm and inadequate remedy at law, the Court concludes that Plaintiff has not shown that it will likely suffer irreparable harm in the future such that the damages already awarded by the jury will not adequately compensate for any losses. At the time of trial, and according to its sealed financial records, Plaintiff had not secured new customers since 2009. As the income from Plaintiff's photos and licensing revenues declined, Plaintiff did not obtain new customers, although Plaintiff's principal continued to attempt to market the photos and entered into negotiations to sell licenses to no avail. Without a new market or income stream derived from photos or licenses for approximately five years, Plaintiff is unable to show that it would be irreparably harmed by loss of income.
 

In addition to the lack of irreparable harm, Plaintiff's principal's testimony supports a finding that damages provide an adequate remedy at law, thereby negating the necessity of entering permanent injunctive relief. Plaintiff's principal testified that a monetary award would compensate him for Plaintiff's losses in the market. The Court concludes that the jury's finding of willful infringement on the part of both Defendants and ensuing damage award, provides an adequate remedy at law for Plaintiff's losses.

The Court did, however, award prejudgement interest ($17k against Ziplocal and $22k against YPG).

Permanent Injunction denied; prejudgment interest granted.
Yellow Pages Photos, Inc. v. Ziplocal, LP, Case No. 8:12-cv-755 (M.D. Fla. June 18, 2014) (J. Lazzara)

Judge Lazzara Takes Senior Status -- No More Patent Cases

As many of you already know, Judge Lazzara took senior status on December 16, 2011. As part of this transition, he is no longer presiding over new patent cases.  See his standing order below.

Judge Lazzara Senior Status Standing Order - 811-mc-132-ral