EBay Seller Given Shot|at Legal-Fee Recovery

     WASHINGTON (CN) — An eBay seller who carved out new copyright case law won a new shot at attorneys’ fees Thursday in his second turn before the U.S. Supreme Court.
     After graduating from Cornell University, Supap Kirtsaeng used his Bluechristine99 account on eBay to finance a doctorate in mathematics at the University of Southern California.
     The Thai citizen had friends and family back home ship him foreign-edition textbooks made by John Wiley & Sons, and he kept the profits for himself after reimbursing the purchase costs.
     Kirtsaeng later found work teaching in Thailand, a condition of one of the scholarships that had helped fund his education.
     In 2008, he also found himself the subject of a lawsuit over his sale of eight foreign-edition Wiley publications.
     A federal jury ordered Kirtsaeng to pay Wiley $600,000 in damages, but the Supreme Court reversed in 2013. That holding said the Copyright Act’s first-sale doctrine allows the resale of foreign-made books, just as it does domestic ones.
     Though no longer on the hook for damages, Kirtsaeng battles on in court to have Wiley cover his attorneys’ fees.
     The Second Circuit shot him down, but the U.S. Supreme Court vacated that holding Thursday, saying the lower courts might not have understood the full scope of the discretion to award fees under Section 505 of the Copyright Act.
     “The contested issue is whether giving substantial weight to the objective (un)reasonableness of a losing party’s litigating position — or, alternatively, to a lawsuit’s role in settling significant and uncertain legal issues — will predictably encourage such useful copyright litigation,” Justice Elena Kagan wrote for the unanimous court.
     Kagan noted that the objective-reasonableness approach Wiley favors “encourages parties with strong legal positions to stand on their rights and deters those with weak ones from proceeding with litigation.”
     As for Kirtsaeng’s position, however, Kagan noted “sure benefits” are uncertain.
     “We accept his premise that litigation of close cases can help ensure that ‘the boundaries of copyright law [are] demarcated as clearly as possible,’ thus advancing the public interest in creative work,” the 12-page opinion states “But we cannot agree that fee-shifting will necessarily, or even usually, encourage parties to litigate those cases to judgment. Fee awards are a double-edged sword: They increase the reward for a victory — but also enhance the penalty for a defeat. And the hallmark of hard cases is that no party can be confident if he will win or lose.”
     Wiley’s approach thus proves “more administrable than Kirtsaeng’s,” Kagan said, but she emphasized that “objective reasonableness can be only an important factor in assessing fee applications — not the controlling one.”
     “Although objective reasonableness carries significant weight, courts must view all the circumstances of a case on their own terms, in light of the Copyright Act’s essential goals,” the decision states.
     “And on that score, Kirtsaeng has raised serious questions about how fee-shifting actually operates in the Second Circuit.”
     As Kirtsaeng noted, “hardly any decisions in that circuit have granted fees when the losing party raised a reasonable argument (and none have denied fees when the losing party failed to do so),” Kagan said.
     The trial court must thus take another look at his fee application on remand.
     “In sending back the case for this purpose, we do not at all intimate that the District Court should reach a different conclusion,” the opinion concludes. “Rather, we merely ensure that the court will evaluate the motion consistent with the analysis we have set out — giving substantial weight to the reasonableness of Wiley’s litigating position, but also taking into account all other relevant factors.”

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