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IP/Entertainment Case Law Updates

Otto v. Hearst Communications Inc

District court denies attorneys’ fees to photographer who prevailed in copyright suit against Hearst Communications based on its unauthorized use of photograph of President Trump, citing Hearst’s colorable fair use arguments and plaintiff’s history of unsubstantiated and outsized settlement demands.

Plaintiff Jonathan Otto filed a copyright infringement suit against Hearst Communications Inc. alleging that Hearst infringed his copyright in an image of President Donald Trump by publishing the photograph on its website Esquire.com. After the close of discovery, Otto and Hearst cross-moved for summary judgment on the issue of liability. The court rejected Hearst’s fair use defense and found Hearst liable for copyright infringement. (Read our summary of the district court’s decision here). Following a bench trial, the court found that Hearst’s infringement was not willful and that a reasonable license fee was $100. The court therefore rejected as “wholly implausible” Otto’s argument that a reasonable license fee was $4,000, and awarded Otto the minimum statutory damages of $750.  

Otto then moved for attorneys’ fees under 17 U.S.C. Sec. 505, claiming Hearst’s defenses to liability were objectively unreasonable, and that an award of attorneys’ fees was necessary to satisfy the Copyright Act’s purposes of compensation and deterrence in cases where the value of the copyright is relatively modest. The court rejected both arguments. First, the court held that although Hearst was ultimately unsuccessful on its fair use defense, its position was not objectively unreasonable because fair use is a complex, fact-driven inquiry, and the factual context of this case involving social media was relatively novel. Second, the court rejected the argument that a plaintiff who successfully asserts infringement of a low-value copyright has a “presumptive entitlement” to attorneys’ fees, as courts must make a “particularized, case-by-case assessment.” The success of a low-value copyright claim is simply one of many relevant factors, not a controlling one.  

In this case, the court noted that the evaluations of the parties’ motivations and the parties’ respective needs for compensation and deterrence did not merit an award of attorneys’ fees. The court noted that throughout litigation, Otto and his counsel, Richard Liebowitz, consistently inflated the value of their claim, leaving Hearst with no choice but to continue the litigation, which cuts against the award of attorneys’ fees. Moreover, the court rejected Otto’s argument that an award of attorneys’ fees was necessary to deter Hearst and similarly situated publishers. There was no evidence presented at trial that Hearst generally disregards the rights of copyright owners. Further, Hearst’s defense of this litigation was not costless, and penalizing Hearst for raising reasonable defenses would reward Otto for prolonging litigation in pursuit of an unjustifiably inflated claim, which does not further the purposes of copyright law. 
 
Summary prepared by Tal Dickstein and Jong-min Choi