The opinion of the court was delivered by: ROBERT SWEET, Senior District Judge
Defendants New Christian Church of Full Endeavor, Ltd., and Endeavor
Academy (collectively, the "Church") have filed a motion for attorneys'
fees under the Copyright Act against plaintiffs Penguin Books, USA, Inc.
("Penguin"), Foundation for Inner Peace, Inc. ("FIP"), and Foundation for
"A Course In Miracles," Inc. ("FACIM"), (collectively, "Plaintiffs"). For
the reasons set forth below, the Church's motion for attorneys' fees is
The original action was commenced on June 3, 1996 by Penguin to enforce
its copyright in a text entitled A Course in Miracles (the
"Course" or the "Work") . On February 3, 2000, Penguin along with FIP and
FACIM moved for a preliminary injunction, and the Church cross-moved for
summary judgment. In an opinion of July 25, 2000, this Court held that
Plaintiffs had established a prima facie case of copyright
infringement in connection with the Work and dismissed the Church's
Affirmative Defenses 1-6 and 8-13. Penguin Books USA, Inc. v. New
Christian Church of Full Endeavor, Ltd. No. 96 Civ. 4126 (RWS),
2000 WL 1028634 (S.D.N.Y. July 25, 2000) ("Penguin I") . After a bench
trial from May 19 to May 21, 2003, the copyright in the Course
was held invalid due to prior publication without notice of copyright. Penguin Books USA. Inc. v. New Christian Church of Full
Endeavor.Ltd., 288 F. Supp.2d 544 (S.D.N.Y. 2003) ("Penguin if") .
Familiarity with these opinions is assumed.
Penguin II granted judgment "with costs to the defendants"
and directed the parties to submit judgment on notice. Penguin
II at 558. The opinion did not specify whether the "costs" granted
were to include attorneys' fees pursuant to 17 U.S.C. § 505, and the
Church filed the instant motion for attorneys' fees on December 31, 2003.
Oral arguments were heard on February 11, 2004. Due to time constraints,
the parties*fn1 were not able to address all the issues they wished to
reach, and the Court permitted the parties to submit additional briefs on
the motion. The parties submitted additional materials, after which time
the motion was deemed fully submitted.*fn2
I. Motion for Attorneys' Fees
The Church argues that Plaintiffs were objectively unreasonable in
bringing their case and that Plaintiffs acted in bad faith during
discovery as well as at trial. The Church also argues that Plaintiffs'
motives in pursuing the litigation were based on an attempt to control the religious use of the
Course. Finally, the Church contends that granting it
attorneys' fees would be in keeping with the purposes of the Copyright
Act. These factors, taken together with the relative financial strength
of the parties, are the basis for the Church's application for attorneys'
The Church seeks a post-judgment award of attorneys' fees pursuant to
Section 505 of the Copyright Act and the inherent equitable power of the
court. Section 505 of the Copyright Act provides that:
[i]n any civil action under this title, the court
in its discretion may allow the recovery of full
costs by or against any party other than the
United States or an officer thereof. Except as
otherwise provided by this title, the court may
also award a reasonable attorney's fee to the
prevailing party as part of the costs.
17 U.S.C. § 505.
In Fogerty v. Fantasy, Inc. 510 U.S. 517 (1994), the Supreme
Court held that the standard governing the award of attorneys' fees under
Section 505 should be identical for prevailing plaintiffs and prevailing
defendants. The Court noted that "[t]here is no precise rule or formula
for making [attorneys' fees] determinations, but instead equitable
discretion should be exercised," id. (internal quotation marks and citation
omitted), and then proceeded to list several nonexclusive factors courts
should consider when exercising this discretion: "`frivolousness,
motivation, objective unreasonableness (both in the factual and in the
legal components of the case) and the need in particular circumstances to
advance considerations of compensation and deterrence.'" id. at
534 n.19 (quoting Lieb v. TOPstone Industries, Inc., 788 F.2d 151,
156 (3d Cir. 1986)). The Court cautioned, however, that such factors
may be used only "so long as [they] are faithful to the purposes of the
Copyright Act." Fogerty, 510 U.S. at 534 n.19.
In evaluating a motion for attorneys' fees, the Second Circuit has
directed that "objective reasonableness is a factor that should be given
substantial weight in determining whether an award of attorneys' fees is
warranted." Matthew Bender & Co., Inc. v. West Pub. Co.,
240 F.3d 116, 122 (2nd Cir. 2001). The mere fact that a defendant
prevailed, however, "does not necessarily mean that the plaintiff's
position was frivolous or objectively unreasonable." Arclightz and
Films Pvt. Ltd. v. Video Palace, Inc., No. 01 Civ. 10135 (SAS),
2003 WL 22434153, at *3 (S.D.N.Y. Oct. 24, 2003); cf. Littel v.
Twentieth Century-Fox Film Corp., No. 89 Civ. 8526 (DLC), 1996 WL
18819, at *3 (S.D.N.Y. Jan. 18, 1996), aff'd sub nom. DeStefano v.
Twentieth Century Fox Film Corp. 100 F.3d 943 (2d Cir. 1996). "To
hold otherwise would establish a per se entitlement to
attorney's fees whenever [issues pertaining to judgment] are resolved against a copyright plaintiff." CK Co.
v. Burger King Corp., No. 92 Civ. 1488 (CSH), 1995 WL 29488, at* *1
(S.D.N.Y. Jan. 26, 1995). In any event, attorneys' fees should
not be awarded to the prevailing party "as a matter of course," but as a
matter of the court's discretion. Fogerty 510 U.S. at 533-34;
accord Matthew Bender & Co. 240 F.3d at 121-22.
B. Plaintiffs' Claim Was Not Objectively
The Church argues that the "Plaintiffs knew they had a factually weak
claim and yet they pursued it . . . ." (Def. Mem. at 7.) The
Church further asserts that because Plaintiffs pursued a claim that they
knew to be without merit based on their own knowledge of the facts, the
claim was objectively unreasonable.
"[N]ot all unsuccessful litigated claims are objectively unreasonable."
CK. 1995 WL 29488, at *1; see also Ann Howard Designs. L.P. v.
Southern Frills. Inc. 7 F. Supp.2d 388, 390 (S.D.N.Y. 1998)
("[A]lthough courts have recognized that costs and fees can be awarded
where one pursues a claim unreasonable on its face, an unsuccessful claim
does not necessarily equate with an objectively unreasonable claim.")
(citation omitted). Rather, the courts of this Circuit have generally
concluded that only those claims that are clearly without merit or
otherwise patently devoid of legal or factual basis ought to be deemed
objectively unreasonable. See, e.g. Littel,
1996 WL 18819, at *2-3 (deeming plaintiffs' claims objectively unreasonable where plaintiffs "`as
much as concede [d] `" that the book and movies at issue bore' no
resemblance at all apart from their titles and the case presented no
novel or complex issues of law or fact) (citation omitted);
Screenlife Establishment v. Tower Video, Inc. 868 F. Supp. 47,
52 (S.D.N.Y. 1994) (deeming plaintiff's pursuit of its claim
for actual damages unreasonable where the claim of actual damages was, at
best, speculative and remote). In other words, the question "is not
whether there was a sufficient basis for judgment in favor of defendants,
but whether the factual and legal support for plaintiff's position was so
lacking as to render its claim . . . objectively unreasonable."
Proctor & Gamble Co. v. Colgate-Palmolive Co., No. 96 Civ.
9123 (RPP), 1999 WL 504909, at *2 (S.D.N.Y. July 15, 1999); see also CK,
1995 WL 29488, at *1 ("The infirmity of the claim, while falling short of
branding it as frivolous or harassing, must nonetheless be pronounced [to
be deemed objectively unreasonable].")
Here, the Church has not demonstrated that Plaintiffs' claim was so
lacking in legal or factual support as to be objectively unreasonable.
Plaintiffs owned a purportedly valid copyright, and the Church published
Plaintiffs' copyrighted material. See Penguin I at *15-16.
These facts alone were enough to establish a prima facie case
and support an objectively reasonable legal claim to protect that
copyright. See id. at *16; Penguin II at 547. While
Plaintiffs' suit was ultimately unsuccessful, a preliminary injunction against the Church was
obtained, Plaintiffs' claim withstood summary judgment, `and Plaintiffs
were able to eliminate twelve of the thirteen affirmative defenses
asserted by the Church. See Penguin II at 547, 558; see also
Penguin I at *22 (noting that "while Plaintiffs' likelihood of success on
the merits of the action is unclear, the discussion of the summary
judgment motions demonstrates beyond doubt that there are sufficiently
serious questions going to the merits to make them a fair ground for
litigation."). It was only after a three-day trial that certain complex