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Vargas et ano. v. Transeau et ano.

The Southern District of New York awarded defendants attorneys’ fees and costs in a copyright infringement action, even though defendants did not prevail on their initial summary judgment motion addressed to originality (the court found plaintiffs’ work to be sufficiently original to support a copyright action). The court did, however, grant defendants’ second motion for summary judgment finding that plaintiffs had failed to establish that defendants’ drum recording, “Aparthanonia,” violated plaintiffs’ copyright in the drum recording, “Bust Dat Groove Without Ride.”

The court explained that there is no precise rule or formula for making attorneys’ fees determinations, but instead equitable discretion should be exercised in determining whether to award costs and fees to a prevailing party. Courts in the Second Circuit accord “substantial weight” to whether the claim was “objectively unreasonable.” The Court specifically stated that it need not make a finding of frivolousness or bad faith to award a fee, but that a consistent lack of evidentiary support for the claim will render it "objectively unreasonable." Further, the court stated that awarding fees to prevailing defendants on the basis of objective unreasonableness “compensates defendants for defending their right to free expression and deters other plaintiffs from bringing similarly unreasonable claims.”

Here, the court found that the utter lack of evidentiary support rendered plaintiffs’ claims “objectively unreasonable.” Because of lack of evidence of access, the plaintiffs needed to show that the two works were “so strikingly similar as to preclude the possibility of independent creation.” The only evidence offered by plaintiffs was expert testimony, which did not preclude the possibility of independent creation. In fact, plaintiffs’ experts expressly admitted the possibility of independent creation, confirmed that defendants did not digitally copy plaintiffs’ work and equivocated on the precise levels of similarity between the two works. The court also stated that plaintiffs’ settlement with the three other defendants was irrelevant to whether the action was objectively unreasonable as to the two victorious defendants who chose not to settle.

In terms of the actual amount awarded to defendants, the court found that defendants submitted detailed time records that sufficiently enabled the court to determine the nature of the tasks performed and the amount of time expended on those tasks. The court also accepted defendants’ proposal to use the lodestar method, by which fees are calculated by multiplying the number of attorney hours reasonably expended by a reasonably hourly rate, or the community rate for an attorney of similar skill and experience, to calculate the fees and costs due to defendants. Using this method, the defendants requested a total of approximately $800,000 in fees and costs.

The court then considered other factors to ascertain the proper amount to award in this particular circumstance. The court took into consideration the fact that defendants ultimately achieved complete success on all claims in this action, the significant sum that plaintiffs received from the settlement with the three other defendants and also plaintiffs’ very limited savings and small monthly income.

The court ultimately determined that $175,000 was the appropriate amount for the fee award, although this was significantly less than the amount of fees and costs submitted to the court by defendants. The court explained that this smaller award would ensure that plaintiffs disgorge any benefits they obtained through the litigation and impose on them an additional penalty to discourage the pursuit of objectively unreasonable claims, but at the same time, would not cause plaintiffs complete financial ruin.