Intellectual Property Law

Courts Split over Legal Fees in Copyright Infringement LawsuitsWired: Threat Level

Defendants who prevail in copyright infringement suits are automatically entitled to defense costs, a federal appeals court is ruling.

The decision (.pdf) by the 7th U.S. Circuit Court of Appeals noted the Copyright Act allows "reasonable" attorney fees to any "prevailing party," in a copyright action, a ruling contradicting a 5th U.S. Circuit Court of Appeals decision last month. The split in the federal circuit courts of appeal sets the stage for a U.S. Supreme Court showdown, as the high court generally takes cases when there is disagreement in the lower courts of appeal.

It's an important point of law as it relates to the Recording Industry Association of America's lawsuit campaign, in which more than 20,000 people have been sued by the music companies' lobbying arm. Most have settled out of court, but when the RIAA drops charges, the defendant hasn't always been awarded attorneys fees.

The U.S. federal judiciary has awarded defense costs in just two RIAA cases.

The 7th Circuit case concerned Riviera Distributors Inc., which alleged that the "Stars and Stripes" video poker game sold by Midwest Electronic Specialties Inc. infringed on Riviera's source code. Riviera subsequently dropped the case, saying it could not prove its allegations. Midwest moved for defense costs.

"Riviera sued; Midwest won. There is no more required," the circuit court ruled.

Last month, however, the 5th Circuit declined to award attorney fees to a San Antonio man the RIAA falsely accused of copyright infringement, ruling that the prevailing party in a copyright infringement case is not always entitled to legal costs.

The 5th Circuit concluded that the RIAA "should not be deterred from bringing future suits to protect their copyrights because they brought an objectively reasonable suit."

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• RIAA Defendant Maintains Innocence Day After Losing Court Battle

Full post as published by IP Law Daily on February 25, 2008 (boomark / email).