J.S. Nicol, Inc. v. Peking Handicraft, Inc.

Plaintiff, a design company, entered into a license with defendant manufacturer allowing defendant to use plaintiff’s fabric designs in exchange for guaranteed royalty payments. After defendant failed to make a quarterly royalty payment, plaintiff filed suit for breach of contract and copyright infringement. A jury found for plaintiff on both claims and awarded plaintiff $315,000 for the breach of contract claim and $112,500 in statutory copyright infringement damages.

Plaintiff filed a motion seeking $674,591.04 in attorneys’ fees, litigation costs and related expenses under § 22 of the License Agreement and under the Copyright Act, 28 U.S.C. § 505. Defendant challenged the plaintiff’s request for attorneys' fees and the parties consented to decision of the fee motion by a magistrate judge. The magistrate judge awarded a total of $32,640 in post-trial attorneys’ fees and $1,806 is post-trial costs and expenses, reducing plaintiff’s request by $23,048.50 in attorneys’ fees and $3,611.89 in expenses.

In challenging plaintiff’s request for attorneys' fees, defendant argued, among other things, that where a party prevails on both a breach of contract claim and a claim based on statute, the statute (in this case, the Copyright Act), not the attorneys’ fee provision contained in the parties’ license agreement, governs the claim for attorneys’ fees relating to the statutory claim. The court disagreed, stating that plaintiff’s copyright claim was dependent upon provisions contained in a contract between the parties. “The contract and copyright claims are based on a common core of facts. J. S. Nicol succeeded on its copyright claim precisely because the jury found that Peking breached the License Agreement, and not because Peking breached the Copyright Act independently of any contract breach. This Court, therefore, finds that the breach of contract and copyright claims should be analyzed under the same general law governing attorneys’ fees, and that there is no need to separately analyze the copyright claims under copyright law.”

The court did, however, reduce plaintiff’s requested attorneys' fees in relation to two copyright infringement claims plaintiff dropped before trial as well as plaintiff’s “wasteful” summary judgment motion.