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District Court of Oregon

Attorney fees denied: $1,000 for one download of The Cobbler is enough

On August 10, 2016, Magistrate Judge Beckerman denied a prevailing plaintiff’s motion for attorney fees in a copyright infringement suit against an unnamed defendant for illegally downloading an Adam Sandler movie (The Cobbler) using the BitTorrent peer-to-peer file sharing protocol. Among the reasons given for denying plaintiff’s motion for attorney fees was the Court’s finding that these types of BitTorrent cases often unfairly punish the defendant for one bad act and do not further the purposes of the Copyright Act.

“The Copyright Act, as it is being enforced in these BitTorrent cases, has created results inconsistent with the goals of the Act. When an individual who has illegally downloaded a movie is contacted by Plaintiff’s counsel, and faces the threat of a statutory damage award that could theoretically reach $150,000 (see 17 U.S.C. § 504(c)(2)), as well as the threat of a substantial attorney fee award, the resulting bargaining process is unequal, and unfair. For this Court to award Plaintiff its attorney fees in this case would only contribute to the continued overaggressive assertion and negotiation of these Copyright Act claims.”  

In this case, the plaintiff (Cobbler Nevada, LLC) sued eleven anonymous users of “Popcorn Time” software. Most settled quickly. Of the four Doe defendants that did not settle quickly, three were dismissed because the plaintiff could not identify a likely defendant with sufficient particularity. Eventually, the sole remaining defendant agreed to a stipulated consent judgment which awarded the statutory minimum amount of damages ($750) and agreed that the court should award “reasonable costs and fees.” The Court awarded costs of about $200, but declined to award any of the $4,700 in requested attorney fees.

In addition to lamenting the “overaggressive assertion and negotiation” of these BitTorrent cases, the Court also questioned the degree of success obtained by the plaintiff and the deterrent value of awarding attorney fees, both factors in determining whether fee shifting is appropriate for any given case. As to the success of the plaintiff in this litigation, the Court noted that the plaintiff accrued over $4,700 in attorney fees to obtain only $750 in damages. And as to deterrence, the Court felt that payment of almost $1,000 ($750 in damages plus costs of about $200) was sufficiently high a price to pay to watch a single movie and that others would be encouraged to “pay a few dollars to rent the same movie legally.”

This decision reflects both the serious problem of online piracy and the potential injustices associated with the business of copyright litigation that has flooded the courts in recent years. According to the plaintiff, The Cobbler was illegally downloaded over 10,000 times in Oregon alone. If true, that is somewhat remarkable given how poorly the movie was received by both critics and viewers. See http://www.rogerebert.com/reviews/the-cobbler-2015 (“If one subscribes to the theory that you can learn as much from a bad movie as from a good one, this one’s a master class in what not to do.”) Although online piracy is a serious problem, the copyright litigation industry that has developed around that problem has also been highly criticized. As noted in the decision, other courts have been critical of the “paradigmatic troll [that] plays a numbers game in which it targets hundreds or thousands of defendants, seeking quick settlements priced just low enough that it is less expensive for the defendant to pay the troll rather than defend the claim.”

For this particular defendant, the denial of attorney fees was undeniably helpful. However, it remains to be seen whether denying attorney fees motions in such cases will have any significant long-term impact on the number of BitTorrent cases filed in Oregon. Although fewer attorney fee awards may reduce some of the incentive for attorneys that file such cases, those that do bring such actions may be more likely to seek higher damages or settlement awards to offset that loss.

 

Posted on 08/24/2016 by Deakin T. Lauer

Oregon beer growler patent duel to proceed on multiple fronts

Drink Tanks Corporation sued GrowlerWerks, Inc. last November for patent infringement based on its sale of growlers, including the uKeg 64 product shown below. Earlier this year, the case was transferred from Delaware to Oregon district court. On June 2, 2016, GrowlerWerks took the fight to the U.S. Patent and Trademark Office (PTO) by filing a petition for Inter Partes Review (IPR) seeking to cancel each claim of Drink Tanks’ beer growler patent due to prior art.

u-Keg 64

GrowlerWerks requested a stay of the litigation based on the IPR filing. On July 15, 2016, Judge Simon denied GrowlerWerks request as premature because the PTO had not yet decided whether to proceed with the IPR.

“GrowlerWerks petition sheds little light on the potential scope of the IPR, and the Court will not base its stay decision on speculation about what the PTO may or may not do. Until the PTO institutes IPR, the Court cannot say that a stay will lead to the simplification of issues in this case. The PTO could grant review of one, several, all or none of the ’670 patent claims. The Court also finds persuasive the reasoning of courts that deny motions to stay without prejudice before the PTO has granted IPR.”  July 15, 2016, Opinion and Order, p. 10.

Such denials are not uncommon before institution, especially when the merits of the IPR petition are not immediately clear from the petition itself or are not specifically addressed in the motion for a stay of the litigation. For now at least, the battle between Drink Tanks and GrowlerWerks will continue on both fronts—at the district court and at the PTO.

July 15 Opinion and Order

 

Posted on 07/22/2016 by Deakin T. Lauer and Todd M. Siegel

Nike sues Skechers for design patent infringement

In a complaint filed in the District Court of Oregon on January, 4, 2016, Nike alleges that several of Skechers product lines infringe design patents owned by Nike.

All eight Nike design patents identified in the complaint (D696,853; D700,423; D707,032; D723,772; D723,781; D723,783; D725,356; and D725,359) issued recently, in 2014 or 2015. According to the complaint, at least some of the patents cover Nike’s “Flyknit” design, which uses yarns and fabric variations to create a “featherweight, formfitting and virtually seamless upper” according to a Nike press release.

The table below is reproduced from the complaint and compares figures from one of the asserted design patents (D696,853) with photos of the accused shoes sold by Skechers.

Nike v. skecher figure

 

Posted on 02/01/2016 by Deakin T. Lauer