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Contractual Copyright Attorneys Fees in the Ninth Circuit

In a case of first impression for the Ninth Circuit Court of Appeals, the court reviewed whether the Copyright Act of 1976 would preclude enforcement of a contractual attorneys fees provision in copyright-based litigation. The case of Victoria Ryan v Editions Limited West, Inc. (9th Cir. May 19, 2015)(available here) tackled this issue, as well as whether the court abused its discretion in calculating the fees.

Ryan is a pastel artist who entered into an agreement with Editions Limited West, Inc. (ELW) to receive a license to publish a limited number of her works in exchange for royalties. The agreement permitted ELW to produce posters of Ryan’s original works, it was silent on subsequent use of those posters for production of derivative works. Ryan believed that her works were improperly being used as derivatives, and made inquires to ELW. Those inquires allegedly went unanswered and she initiated th lawsuit.

In separate motions, ELW filed and was awarded summary judgment on all of Ryan’s claims. However, Ryan filed competing motion for summary judgment seeking afinding that she was the prevailing party within the meaning of the Agreement, despite the fact that ELW obtained judgment on all claims.  Ryan appealed once, and the Court affirmed all summary judgment orders, except for the contributory and vicarious copyright infringement claims, with the instruction: “I the district court finds that ELW is liable for contributory or vicarious infringement, it should reconsider whether Ryn is the prevailing party under the broad language of the contract, and whether she is entitled to a permanent injunction against ELW.”

Upon return to the District Court, and prior to the bench trial, Ryan filed motion for sanctions based on alleged spoilation by ELW of evidence. This was denied by the lower court. After the bench trial, th court found in favor of Ryan on her contributory infringement claim, but that she could not substantiate a claim to any portion of ELW’s profits or any other damages award. The lower court also ruled that she was the prevailing party under the Agreement. She submitted an affidavit of fees from her counsel, and the court apportioned her request of $328k down to $51k, claiming this represented those fees in connection with the contributory infringement claim.

Ryan conceded that she was not entitled to fees under 17 U.S.C. 412, and instead sought fees under the fee shifting provision of the Agreement. The 9th Circuit began its review by discussing preemption. Specifically, the Court discussed whether the Copyright Act would preempt the state law allowing for the execution and enforcement of contractual fee-shifting provisions. The Court concluded the Copyright Act did not preempt Ryan’s rights under th Agreement and in accordance with California state law.

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