Seventh Circuit Court of Appeals Affirms $750,000 Attorney Fee Award to Defendant CitiCorp in Copyright Infringement Case

Chicago, IL – Copyright Infringement attorneys for Defendant CitiCorp succeeded in preserving a $750,000 recovery of attorneys fees.  The trial court had awarded the Defendant attorney’s fees after dismissing the Plaintiff software copyright infringement suit for “for want of prosecution” because it failed to prepare a proper proposed pre-trial order.  The court for the Seventh Circuit (which includes Indiana, Illinois and Wisconsin) stated:

“This litigation was marked by excessive and unnecessary filings that richly deserve the label vexatious. Rhine’s objections are quibbles. He contends, for example, that he did not demand $15 billion in damages–a stupendous figure that led defendants to generate far more paper, and endure higher legal bills, than any plausible claim would have warranted. No, Rhine insists, all he did was demand that defendants and the court use a formula that worked out to $15 billion. The fact that the phrase “$15 billion” does not appear in a complaint is irrelevant. A complaint that demands $150,000 (the statutory cap) times 100,000 (the complaint’s estimate of the number of times computers copied the software into random access memory) is demanding $15 billion. Even lawyers can multiply two numbers. And the fact that this sum is, in the words of Rhine’s appellate brief– he is representing himself and testing the adage that a lawyer who does this has a fool for a client–“one prayer for relief, out of many, and based on certain possible scenarios” does not help. One other prayer “out of many” was for statutory damages of $7.2 million ($150,000 times 48, the number of outside law firms that used the software), which is no more tenable than $15 billion. Another demand was for $235 million in actual damages, which plaintiff never attempted to prove and now has abandoned. No more need be said about the award against Rhine.”

Click here to see the Court’s Opinion.

Practice Tip:  This case confirms that plaintiffs should be cautious in asserting a copyright infringement suit.  Copyright infringement is one of the few types of suits in which the “prevailing party” is entitled to recover their attorney’s fees.  In this case, the Seventh Circuit confirmed their view that a defendant that prevails in copyright litigation is “presumptively entitled to fees under § 505,” citing Mostly Memories, Inc. v. For Your Ease Only, Inc.,526 F.3d 1093, 1099 (7th Cir.2008).  This case is also helpful because it discusses the circumstances for awarding attorneys fees under a separate statute, 28 USC § 1928, which covers “vexatious” litigation.

 

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