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IP/Entertainment Case Law Updates

Pythagoras Intellectual Holdings LLC v. Stegall, et al.

In patent, trademark and copyright infringement action, court grants defendants’ motion for attorney’s fees in relation to the copyright and trademark claims, holding that plaintiffs’ copyright claims are frivolous

The court granted summary judgment to some defendants in this copyright, trademark and patent infringement action relating to plaintiffs’ designs, trademarks and photographs of its tempered glass fireplaces. After granting summary judgment, the court dismissed the remainder of the case with prejudice for failure to prosecute and failure to comply with a court order. Defendants in this ruling did not join in the motion for summary judgment, but subsequently filed a motion for attorney’s fees. Under the Copyright Act, courts may award reasonable attorney’s fees to the prevailing party in a copyright claim as a part of the costs. 17 U.S.C. § 505. In Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994), the Supreme Court held that the prevailing party language in 17 U.S.C. § 505 included prevailing defendants.

The court granted the motion with respect to the copyright and trademark claims. The court considered (1) the degree of success obtained by the prevailing party; (2) frivolousness of the losing party’s claim; (3) the motivation of the losing party; (4) the reasonableness of the losing party’s legal and factual arguments; and (5) the need to advance considerations of compensation and deterrence.

The court held that plaintiffs’ copyright claims were frivolous because plaintiffs failed to allege how defendants infringed upon plaintiffs’ copyright, plaintiffs failed to produce information in discovery regarding defendants’ conduct, and, according to the court, plaintiffs knew that the copyright claims were unfounded, yet continued to argue those claims. The court also held that “the need for deterrence here is strong. An award of fees in this case will deter plaintiffs from filing and arguing frivolous and baseless claims in the future. An award of fees will also encourage plaintiffs to withdraw future claims when plaintiffs discover that the claims are no longer viable [and] an award of fees will encourage plaintiffs to choose defendants carefully in future suits and ensure that plaintiffs have a reasonable basis for each claim against each defendant.”

The court also held that the degree of success obtained by defendants was high because the court dismissed all of plaintiffs’ claims against defendants, and the need for compensation was strong because plaintiffs failed to provide evidentiary support for their copyright infringement claim, and plaintiffs failed to timely respond to defendants’ discovery requests and subsequently served insufficient responses.

The court also held that plaintiffs’ trademark claim was objectively groundless and unreasonable. The court concluded that plaintiffs failed to allege how defendants infringed on the trademark and pursued their trademark infringement claim against defendants without evidentiary support.

The court denied defendants’ request for attorney’s fees relating to the patent claim because defendants did not met their burden of showing by “clear and convincing evidence” that the patent case is exceptional. “Although the litigation eventually ended in defendants’ favor, the court cannot find that plaintiffs knew that their patent claims against defendant would fail or that the plaintiffs acted in bad faith in bringing the patent claims.”

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