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IP/Entertainment Case Law Updates

John Wiley & Sons, Inc. v. Kirtsaeng

Second Circuit affirms denial of defendant’s request for attorneys’ fees in copyright infringement dispute, finding plaintiff pursued objectively reasonable litigation position, having previously prevailed in both district court and Second Circuit before losing in a split U.S. Supreme Court decision on the “first sale” doctrine.

John Wiley & Sons, Inc., publishes academic textbooks and assigns a foreign subsidiary the right to publish and sell its English-language textbooks abroad. Supap Kirtsaeng, a Thai citizen who moved to the United States to attend Cornell University, arranged for his friends and family to buy copies of foreign-edition, English-language textbooks at Thai bookshops, where they were sold for lower prices, and mail them to him in the United States, where he resold them for a profit. Wiley brought suit against Kirtsaeng for copyright infringement, claiming that the importation and resale of Wiley’s textbooks was unauthorized and infringed its exclusive right to distribute the books under section 106(3) of the Copyright Act and violated the importation prohibition of Section 602. Both the district court and the Second Circuit held in favor of Wiley on the copyright infringement claim, but in a 6-3 decision, the U.S. Supreme Court reversed, holding that the “first sale” doctrine applies to copies of copyrighted works lawfully made abroad, and that importation and resale of textbooks manufactured and sold abroad is therefore not an infringement of the publisher’s exclusive distribution right. (Read our summary of the Supreme Court’s decision here.) Kirtsaeng subsequently sought attorneys’ fees under section 505 of the Copyright Act, and the district court denied the motion.

In a summary order, the Second Circuit affirmed the district court’s decision, holding that Wiley had pursued an objectively reasonable litigation position, as it had prevailed both in the district court and in its initial appeal to the Second Circuit. Kirtsaeng sought to limit a prior Second Circuit decision, Matthew Bender & Co. v. W. Pub’g Co., which held that substantial weight should be placed on the reasonableness of the losing party’s litigation position, contending that the decision applied only where the prevailing defendant did not advance the purposes of the Copyright Act. The Second Circuit explained that Bender’s emphasis on objective reasonableness did further the purposes of the Copyright Act. The Second Circuit explained that “the imposition of a fee award against a copyright holder with an objectively reasonable litigation position will generally not promote the purposes of the Copyright Act.”

Kirtsaeng further argued that the district court “fixated” on Wiley’s objective reasonableness, at the expense of other relevant factors. The Second Circuit disagreed, finding that the district court had adequately analyzed the other factors, and did not abuse its discretion in holding that those factors did not outweigh the “substantial weight” afforded to Wiley’s objective reasonableness.

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