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Mostly Memories, Inc. v. For Your Ease Only, Inc.

In this copyright infringement action, the Seventh Circuit held that the defendants were entitled to attorneys’ fees under section 505 of the Copyright Act where the complaint had been dismissed with prejudice upon the plaintiff’s own motion, after the plaintiff’s counsel had concluded that its claims were baseless. The district court had denied defendants’ motion for attorney’s fees without explanation but stated that the plaintiff’s actions did not warrant the imposition of sanctions.

The Seventh Circuit found the district court’s summary denial of the motion for attorneys’ fees “too threadbare to constitute a reviewable exercise of discretion.” Reversing the district court ruling, the court held that “the loser’s conduct need not be ‘sanctionable’ for the winner to be entitled to attorney’s fees under § 505.” Rather, under Seventh Circuit precedent, the prevailing party in Copyright Act litigation is “presumptively” entitled to an award of fees under 17 U.S.C. § 505, and the presumption is “very strong” in the case of prevailing defendants. Noting that a dismissal with prejudice certainly makes the defendants the prevailing party under Section 505, irrespective of whether the dismissal is on the plaintiff’s own motion, the court applied the presumption to reverse the district court’s order and remand for the entry of an appropriate award of fees. The court also reversed the district court’s one-sentence dismissal of the defendants’ counterclaims.