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Diplomatic Man, Inc. v. Nike, Inc.

Attorneys’ fees and costs in copyright infringement suit involving advertiser’s use of song allegedly co-owned by plaintiff

The court awarded defendant Nike attorneys’ fees and costs totaling $324,855.69 after dismissing plaintiff Diplomatic Man, Inc.’s copyright infringement action with prejudice for failure to prosecute. Diplomatic Man sued Nike for infringement after Nike used the song The Second Coming, which was created by hip-hop artist Juelz Santana and producer Just Blaze, to promote its Air Force 25 shoe line. Finding that plaintiff’s claim had little merit and that plaintiff’s conduct was “characteristic of abusive litigation,” the court granted Nike’s fee request in full.

In 2006, hip-hop artist LaRon James, professionally known as Juelz Santana, collaborated with music producer Just Blaze to create the song The Second Coming. Santana and Blaze entered into licensing agreements with Nike, permitting Nike to use the song to promote its Air Force 25 shoes. At the time the song was created, Diplomatic Man acted as Santana’s production company. Prior to creation of The Second Coming, Diplomatic Man assigned its ownership interests in copyrights created by Santana to the Island Def Jam record label. Soon after the song was recorded, Nike shot a “making of” video, showing how the song was created and featuring footage of Santana and Blaze in the studio. The founder, sole shareholder and CEO of Diplomatic Man, the recording artist Cam’Ron, also appeared in the video. Cam’Ron authorized his agent to sign a release for Nike to use his image in the video.

Although Cam’Ron did not object during the filming of the video to Santana’s participation in the Nike promotion campaign or to the use of the song in a Nike commercial, Diplomatic Man commenced a copyright infringement action against Nike regarding the use of The Second Coming on January 8, 2008. During the months that followed, plaintiff failed to participate in discovery. Plaintiff did not respond to Nike’s requests for documents and supplemental discovery responses. On the date set for close of discovery, plaintiff’s counsel moved to withdraw on the grounds that plaintiff had ceased communications despite counsel’s repeated attempts to discuss discovery. In response to counsel’s motion, the court ordered plaintiff to send a representative to appear at a December 12, 2008, conference. Pursuant to the court’s order, when plaintiff did not send a representative to the conference or contact its counsel, the court dismissed the action with prejudice for failure to prosecute under Rule 41 of the Federal Rules of Civil Procedure.

Nike promptly moved for an award of attorneys’ fees and costs pursuant to § 505 of the Copyright Act. Exercising its discretion to award costs and fees to the prevailing party, the court considered Nike’s entitlement to an award based on the “equitable factors of frivolousness, motivation, objective reasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.” The court found that plaintiff’s claim was “objectively unreasonable on the merits and this unreasonableness was further compounded by plaintiff’s conduct throughout the proceeding.” While the court stated that it was not even clear whether plaintiff owned the copyright in The Second Coming, plaintiff had, at a minimum, created an implied license through Cam’Ron’s appearance in the “making of” video. Furthermore, the court reasoned that, because the song is a work of joint authorship, co-author Blaze had the right to license the work to Nike without Santana’s permission. Nike was therefore immune to plaintiff’s infringement claim. The court emphasized that plaintiff should have been quite familiar with this aspect of joint authorship, as the principle was explained in “another meritless action brought by plaintiff concerning another of Santana’s songs.” See Diplomatic Man, Inc. v. Brown, No. 05 Civ. 9069, 2007 U.S. Dist. LEXIS 72699 (S.D.N.Y. Sept. 28, 2007). Going beyond its discussion of the merits of plaintiff’s claim, the court severely criticized plaintiff’s conduct throughout the action. The court found that plaintiff “basically abandoned the case” and failed “even to show up for [its] attorneys’ motion to withdraw.” “All of this conduct is characteristic of abusive litigation and further supports an award of fees and costs to Nike.” Concluding its discussion of Nike’s entitlement to an award, the court voiced its intent to “specifically curb this particular plaintiff’s propensity for bringing unreasonable actions.”

Nike sought an attorneys’ fee award of $311,072.50, which the court allowed in full. The court stated that it reviewed the fees charged and found that “they appear roughly reasonable.” Analyzing the hourly rates charged, the court stated that they were “perfectly reasonable,” as these are the rates Nike was willing to pay. The court confirmed the “general reasonableness” of the fees by reviewing counsel’s bills and finding “no obvious problems of excess or waste.” However, even under the court’s liberal standards, $25,628.60 of the $39,411.79 in requested costs were disallowed as double counting. Ultimately, the court awarded Nike $311,072.50 in attorneys’ fees and $13,783.19 in costs, for a total of $324,855.69, and gave Nike the opportunity to support an additional application for fees and costs incurred in December 2008. At Nike’s request, the court also dismissed Nike’s third-party complaint against Santana without prejudice.