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Silberstein v. Fox Entertainment Group, Inc., et al.

Plaintiff Ivy Silberstein sued the producers and distributors of the movie Ice Age for copyright and trademark infringement relating to a cartoon drawing developed for the plaintiff depicting a hybrid squirrel-rat that she named “Sqrat.” The court granted the defendants’ motion for summary judgment on all claims and the ruling was affirmed by the Second Circuit. The defendants moved for attorney’s fees and costs under §505 of the Copyright Act and §1117(a) of the Lanham Act, and the court denied the motion.

Although courts have discretion under §505 to award attorney’s fees to a party, there is “no precise rule or formula,” and courts may consider several non-exclusive factors including frivolousness, motivation, objective unreasonableness and the need in particular circumstances to advance considerations of compensation and deterrence. The Second Circuit has noted that “objective reasonableness is a factor that should be given substantial weight in determining whether an award of attorneys’ fees is warranted.” However, prevailing parties are not entitled to fees merely because they have been successful on a motion to dismiss or for summary judgment because to do so would “establish a per se entitlement of attorney’s fees whenever issues pertaining to judgment are resolved against a copyright plaintiff.” Courts in the Second Circuit have generally concluded that only those claims that are clearly without merit or otherwise patently devoid of legal or factual basis ought to be deemed objectively unreasonable.

The defendants argued that the plaintiff’s copyright claims were objectively unreasonable in light of the district court’s conclusion that there was no substantial similarity between plaintiff’s Sqrat and defendants’ Scrat and that the plaintiff failed to prove that defendants had access to her creation. The court disagreed because it did not consider the plaintiff’s claim to be “patently devoid of merit.” “The existence of limited similarities between characters that both appeared to be a hybrid squirrel-rat and both of which bore obviously similar names persuades the court that plaintiff’s claims were not specious or objectively unreasonable.” And even though the court had characterized the plaintiff’s evidence of defendants’ access to her creation (which included evidence of plaintiff’s pitching her Sqrat to a corporate affiliate of one of the defendants and the dissemination of information regarding Sqrat to entertainment industry professionals), it was sufficient to render her arguments not objectively unreasonable. The court also rejected the defendants’ argument that the plaintiff acted in bad faith.

Attorney’s fees may be awarded under the Lanham Act only in “exceptional cases” which the Second Circuit has interpreted to refer to instances of fraud, bad faith or willful infringement. In this case, the court concluded that the plaintiff had a reasonable basis for claiming that her use of Sqrat to describe a hybrid squirrel-rat may have been infringed by defendants’ use of a similar name, Scrat, to describe and promote a similar cartoon figure. Even though the court concluded that the plaintiff’s efforts to promote her mark were not sufficient to establish “‘use” of the mark “in commerce” and thereby bring her property within the scope of the Lanham Act, her claim was not baseless because “had plaintiff sufficiently commercialized her creation she may well have been entitled to protection.”