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YS Built, LLC v. Huang

United States District Court, W.D. Washington, Seattle

March 23, 2017

YS BUILT, LLC, Plaintiff,
v.
YA HSING CHIANG “CINDY” HUANG, GEORGE HUANG, and their marital community, Defendant.

          ORDER GRANTING DEFENDANTS' MOTION FOR ATTORNEY'S FEES AND COSTS

          BARBARA JACOBS ROTHSTEIN, U.S. DISTRICT COURT JUDGE

         On December 20, 2016, this Court entered judgment in favor of Defendants Cindy and George Huang in the copyright action brought against them by Plaintiff YS Built, LLC. The facts of this case are well known to the parties and contained in the Court's Memorandum Opinion [Dkt. #75]. Defendants, as the prevailing parties, now move for an award of attorney's fees and full costs under the Copyright Act, 17 U.S.C. § 505. Plaintiff opposes Defendants' motion.

         I. Appropriateness of attorney's fees

         Section 505 of the Copyright Act provides that the Court may “award a reasonable attorney's fee to the prevailing party” in a copyright action. 17 U.S.C. § 505. “There is no precise rule or formula” for determining whether a prevailing party in a particular case is entitled to a fee award. Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994) (quoting Hensley v. Eckerhart, 461 U.S. 424, 436-37 (1983)). Rather, “equitable discretion should be exercised” by the Court. Id. There is a “pair of restrictions” to this discretion, however: (1) “a district court may not ‘award[ ] attorney's fees as a matter of course'; rather a court must make a more particularized, case-by-case assessment”; and (2) “a court may not treat prevailing plaintiffs and defendants differently. Kirtsaeng v. John Wiley & Sons, Inc., ___ U.S. ___, 136 S.Ct. 1979, 1985 (2016) (citing Fogerty, 510 U.S. at 527, 533-34)). “[A] successful defense of a copyright infringement action may further the policies of the Copyright Act every bit as much as a successful prosecution of an infringement claim by the holder of a copyright.” Fogerty, 510 U.S. at 527.

         Keeping in mind that “[t]he primary objective of the Copyright Act is to encourage the production of original literary, artistic, and musical expression for the good of the public, ” there are five factors that district courts consider when making a fee determination: (1) the degree of success obtained; (2) frivolousness of the Plaintiff's claim; (3) motivation; (4) objective reasonableness (both in factual and legal arguments in the case); and (5) the need in particular circumstances to advance considerations of compensation and deterrence. Fogerty, 510 U.S. at 524; Inhale, Inc. v. Starbuzz Tobacco, Inc., 755 F.3d 1038, 1042 (9th Cir. 2014) (quoting Jackson v. Axton, 25 F.3d 884, 890 (9th Cir. 1994)). “These factors are not exclusive, and not all need to be considered or met.” Coble v. Renfroe, No. C11-0498RSM, 2012 WL 1077843, at *1 (W.D. Wash. March 30, 2012). Defendants contend that they are entitled to an award of attorney's fees not only because they prevailed against Plaintiff's copyright claim, but also because Plaintiff's suit was frivolous, objectively unreasonable, and improperly motivated.

         A. Degree of success obtained

         Defendants prevailed completely on Plaintiff's copyright claim. The Court concluded that the copyrighted Schneider Plan and its alleged copy, the Stanbrooke Plan, were not substantially similar architectural works and found in favor of Defendants. Mem. Op., Dkt. 75 at 6.

         B. Frivolousness and objective unreasonableness

         A copyright claim is frivolous if it is “so meritless that there is little chance of success.” Broad. Music, Inc. v. C.B.G., Inc., No. 11-CV-40142-FDS, 2014 WL 4656879, at *2 (D. Mass. Sept. 12, 2014) (citing Garcia-Goyco v. Law Envtl. Consultants, Inc., 428 F.3d 14, 20 (1st Cir. 2005); Applied Innovations, Inc. v. Regents of the Univ. of Minn., 876 F.2d 626, 638 (8th Cir. 1989)). “A claim . . . is not frivolous if it is brought in good faith, in an unsettled area of the law, or with a reasonable likelihood of success.” Mattel, Inc. v. Walking Mountain Prods., No. CV99-8543RSWL(RZX), 2004 WL 1454100, at *2 (C.D. Cal. June 21, 2004)). Because determinations of frivolousness often shade into determinations of objective unreasonableness, the Court will consider these factors together.

         Defendants argue that Plaintiff's copyright claim was legally and factually untenable. In order to prove infringement, Plaintiff was required to demonstrate that the Schneider Plan and the Stanbrooke Plan were “substantially similar in idea and expression.” Feist Pub'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). The substantial-similarity test has two prongs- the “extrinsic” test, which is an objective comparison of individual design elements, and the “intrinsic” test, which evaluates whether two works are “substantially similar in the total concept and feel of the works.” Nw. Home Designing, Inc. v. Benjamin Ryan Communities, LLC, 2016 WL 5373144, at *3 (W.D. Wash. Sept. 26, 2016) (slip op.) (internal citations omitted); see also Smith v. Jackson, 84 F.3d 1213, 1218 (9th Cir. 1996). Plaintiff's failure to demonstrate substantial similarity does not itself render the copyright claim frivolous or objectively unreasonable. But Plaintiff's choice to bring suit in spite of facts that could not support the claim does weigh in favor of a finding of objective unreasonableness. First, “most, if not all” of the alleged similarities between the Schneider and Stanbrooke plans were not protected by Plaintiff's copyright. Dkt. 77 at 5; See Mem. Op., Dkt. 75 at 5; Zalewski v. Cicerco Building Dev., Inc., 754 F.3d 95, 106 (2d Cir. 2014); Nw. Home Designing, Inc. 2016 WL 5373144, at *7. Second, the lack of overall similarity between the Stanbrooke Plan and the Schneider Plan was apparent. “A [copyright] claim is more likely to be found frivolous or objectively unreasonable . . . when the lack of similarity between the unsuccessful plaintiff's work and the allegedly infringing work [is] obvious.” Randolph v. Dimension Films, 634 F.Supp.2d 779, 794 (S.D. Tex. 2009) (citing Mallery v. NBC Universal, 331 Fed.Appx. 821, 823 (2d Cir. 2009)). Indeed, the Court found that “[t]he Schneider floorplan [wa]s relatively minimalistic and spare, ” while the Stanbrooke plan was “closed[, ] and the walls [we]re more solid and confining.” Mem. Op., Dkt. 75 at 5.

         Thus, the Court finds that Plaintiff did not have a reasonable likelihood of success on its copyright claim. The claim was, therefore, objectively unreasonable, if not frivolous.

         C. Motivation

         Defendants contend that Plaintiff's suit was motivated “purely by spite, retaliation, and its desire to be the exclusive builder of [Defendants'] house.” Dkt. 77 at 6. While the Court does not opine on the clearly personal nature of Defendants' accusation, it does agree that the copyright suit appears to have been instituted not to advance the public good envisioned by the Copyright Act, but to bully Defendants into a building project they did not want to be part of. Plaintiff obtained its copyright interest in the Schneider Plan only after learning that Defendants were looking to contract with another builder, Stanbrooke Custom Homes. Mem. Op. Dkt. 75 at 2. It appears to the Court, then, that the copyright was merely a means to an end.

         “The monopoly privileges that Congress may authorize are neither unlimited nor primarily designed to provide a special private benefit. Rather, the limited grant is a means by which an important public purpose may be achieved.” Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984). “[C]opyright assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work.” Feist Pub'ns, Inc., 499 U.S. at 349-50. Plaintiff's suit did little to advance the public interest, and, in fact, harmed the public by seeking to restrict access to ...


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