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Ninth Circuit Rules Attorneys Fees Available in Declaratory Judgment Action

General / May 17, 2020

Article by Clyde Shuman 

In a unanimous decision, a panel for the U.S. Court of Appeals for the Ninth Circuit held that, even when asserted as a claim for declaratory relief, any action that turns on the existence of a valid copyright and whether that copyright has been infringed invokes the Copyright Act, thus giving the district court discretion to award reasonable attorney’s fees pursuant to 17 U.S.C. § 505. The Court, in Doc’s Dream LLC v. Dolores Press Inc. et al., case number 18-56073, vacated a district court order denying the defendant’s motion for recovery of attorney’s fees under the Copyright Act and remanded. The district court had granted summary judgment in favor of defendant on a complaint seeking a declaration that the works at issue were abandoned to the public domain. The district court denied defendant’s motion for attorney’s fees, holding that fees were not available under § 505 because the determination of copyright abandonment did not require construction of the Copyright Act.

By way of background, Dr. Eugene Scott, an ordained minister in Glendale, California, launched the first 24-hour-a-day religious television network. He subsequently licensed Dolores Press, Inc. to distribute his works to the public, with profits going to his church. Dr. Scott made his works available for online viewing through websites bearing his name. After his death, his widow continued the license agreement with Dolores Press, Inc.

In 2014, Patrick Robinson, a Georgia minister and sole owner of Doc’s Dream, requested permission to share Dr. Scott’s works with his students online. When Ms. Scott refused his request, Robinson launched a website sharing Dr. Scott’s works, leading to litigation, specifically four lawsuits. In three of the lawsuits, Dolores alleged copyright infringement by Doc’s Dream. In the fourth, Doc’s Dream claimed that Dr. Scott had abandoned rights to his works before his death. The district court dismissed Dolores’ three suits and granted summary judgment in favor of Dolores as to the fourth. On appeal, the Ninth Circuit reversed all three dismissals and affirmed the summary judgment.

As the prevailing party in the summary judgment ruling, Dolores sought recovery of attorney’s fees under the fee-shifting provision of 17 U.S.C. § 505, citing the factors supporting a fees award as announced by the Supreme Court in Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979 (2016). However, the district court held that attorney’s fees were not available pursuant to § 505, noting that the Ninth Circuit had not explicitly held that attorney’s fees are available under the Copyright Act in declaratory relief actions, and instead relying on the Nimmer copyright law treatise, including especially “that courts generally award attorneys’ fees under the Copyright Act in declaratory relief actions so long as the action requires construction of the Copyright Act.”

The district court read Nimmer to indicate that if a declaratory relief action is only superficially related to copyright, it “does not arise under the Copyright Act,” and “fees could not be awarded under the Copyright Act.” Since, per the district court, “[c]opyright abandonment is a judicially-created doctrine based in principles of equity; it is not based on any provision of the Copyright Act,” an award of attorneys’ fees under § 505 was not available in this case.

On appeal, the Ninth Circuit first identified it called “two leaps of logic” underlying the district court’s denial of attorney’s fees: (i) that in order to be a civil action under the Copyright Act, a declaratory judgment must require “construction” of the Copyright Act; (ii) because copyright abandonment is a judicially created doctrine based in principles of equity and not on any provision of the Copyright Act, a declaratory relief action based on abandonment does not invoke the Copyright Act.

With respect to the first “leap,” the Ninth Circuit said that Nimmer does not support adding “construction” to the “any civil action” language of § 505. The Court specifically noted that the section of Nimmer relied on by the district court is contrary to the lower court’s conclusion that attorney’s fees were not available because Doc’s Dream’s action did not require construction of the Copyright Act. The Court found that one of Nimmer’s explanatory hypotheticals was nearly identical to the case at hand, i.e., seeking “a declaration that the work[s] in question fall[] outside the scope of copyright protection.” Under Nimmer, this would require consideration of the Copyright Act, supporting an award of fees to the prevailing party.

The Court said, “We read § 505, as does Nimmer, to allow the discretionary award of attorney’s fees in any action where the scope of the copyright is at issue.”

The Court also rejected the district court’s assertion that the judicial origin of copyright abandonment, predating the Copyright Act and thus existing outside of the Act, provides an alternate ground for denying attorney’s fees. The Court pointed out that the district court’s grant of summary judgment shows that Doc’s Dream’s complaint raised at least three aspects of the Copyright Act: (i) copyright attribution under § 106A; (ii) transfer of copyright ownership, including licensing, under §§ 101, 204; and (iii) the legal effect of copyright notices, under § 401. Per the Ninth Circuit, “the district court’s summary judgment order required consideration of the Copyright Act.”

The Court also rejected the assertion that the declaratory judgment suit “[was] not an action that was brought under the Copyright Act but rather one that was brought under the Declaratory Judgment Act.” The Court said this assertion reflected a misunderstanding of the scope of the Declaratory Judgment Act (DJA) and the interplay required between it and federal questions of law, finding that the DJA and Copyright Act work in tandem. The Court noted that the DJA alone does not create federal jurisdiction, and said it was unclear how, absent the Copyright Act, Doc’s Dream would have asserted federal court jurisdiction. Regardless, the Court noted that Doc’s Dream’s complaint specifically invoked the Copyright Act: “Indeed, in addition to alleging Dr. Scott’s copyright abandonment, the complaint requested reasonable attorney’s fees under [§ 505].”

The Court concluded by holding that “any action that turns on the existence of a valid copyright and whether that copyright has been infringed sufficiently invokes the Copyright Act as to allow for the discretionary award of attorney’s fees. This ruling encompasses claims of copyright abandonment, even when asserted in a claim for declaratory relief.” Accordingly, per the Court, Doc’s Dream’s declaratory judgment claim arose under the Copyright Act, giving the court discretion to award reasonable attorney’s fees to Dolores.

 

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