Case 1:16-cv-03638-LTS Document 70 Filed 06/13/18 Page 1 of 9
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`SARA DESIGNS, INC.,
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`Plaintiff,
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`No. 16 CV 3638-LTS
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` A
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` CLASSIC TIME WATCH CO. INC. and
`NEW YORK AND COMPANY, INC.,
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`Defendants.
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`A Classic Time Watch Co. Inc. and New York and Company, Inc.
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`MEMORANDUM ORDER
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`(“Defendants”), have moved the Court for a grant of attorneys’ fees pursuant to 17 U.S.C.
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`section 505 (“Section 505”) following the dismissal of Sara Designs, Inc.’s, copyright
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`infringement claims. (Docket Entry No. 54.)
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`The Court has considered the submissions of the parties carefully and, for the
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`following reasons, grants Defendants’ motion for attorneys’ fees.
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`BACKGROUND
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`In its original Complaint, Sara Designs, Inc. (“Plaintiff”), alleged, inter alia, that
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`Defendants infringed on Plaintiff’s copyright in “wrap” style watches. Several purportedly valid
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`copyright registration certificates were attached to the complaint, but the certificates were devoid
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`of descriptions (other than model numbers), other references to, or images of the purportedly
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`copyrighted material. See Sara Designs, Inc. v. A Classic Time Watch Co., 234 F. Supp. 3d 548,
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`554-55 (S.D.N.Y. 2017) (the “February Order”); (see also Complaint, Docket Entry No. 5).
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`Defendants moved to dismiss the Complaint. On December 12, 2016, after Defendants’ motion
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`Case 1:16-cv-03638-LTS Document 70 Filed 06/13/18 Page 2 of 9
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`to dismiss had been fully briefed, the Court gave Plaintiff an opportunity to supplement and
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`clarify its pleading, ordering Plaintiff to file a supplemental submission by January 13, 2017,
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`“clarifying the specific copyrighted watches it claims to have been infringed and any
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`corresponding allegedly infringing watches, including providing a side-by-side comparison or
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`chart with images of the watches, and documentation clarifying the scope of the copyright
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`application and grant covering the allegedly infringed watches.” (Order, Docket Entry No. 32.)
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`The Court noted that “the certificates of registration attached as Exhibit B to the Complaint
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`merely list the generic titles and, apparently, marked numbers of the works without any
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`discernable corresponding watch design or image.” (Id.) Defendants’ response to the order did
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`not elucidate the features of the designs that Plaintiff claimed were being infringed. (See
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`generally Supp. Decl. of Barry E. Janay, Docket Entry No. 33.) In a January 20, 2017, Order,
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`the Court gave Plaintiff a further chance to clarify its claims, ordering the parties to appear for
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`oral argument of the motion to dismiss and noting that the supplemental declaration identified
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`seven purportedly infringing watches but that Plaintiff had “presented only two potentially
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`relevant Certificates of Registration.” (Docket Entry No. 35.) Plaintiff’s counsel proffered at the
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`oral argument that Plaintiff had additional materials that would support its claim that the
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`certificates of registration cover the allegedly infringed watches, acknowledged that the material
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`had not been included in the supplemental submission, and made an oral application for leave to
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`amend the Complaint. February Order, 234 F. Supp. 3d at 553. The Court took the motion
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`under advisement following the oral argument and issued the February Order shortly thereafter.
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`Id.
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`In that February Order, the Court dismissed Plaintiff’s federal copyright claim for
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`failure to plead sufficiently that the allegedly infringed copyrights were properly registered or
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`preregistered, a necessary prerequisite to bringing suit for copyright infringement pursuant to 17
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`U.S.C. section 411(a). February Order, 234 F. Supp. 3d at 554-55. The Court found that
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`Plaintiff had not plausibly alleged, either through attached documents or in the body of the
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`Complaint, that the allegedly infringed designs were indeed subjects of the proffered registration
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`certificates. Id. The Court provided Plaintiff with a 21-day window of time in which to make a
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`motion for leave to amend the complaint, requiring that the motion be accompanied by a
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`memorandum of law and a copy of the proposed amended complaint. Id. at 558. The February
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`Order clearly provided that Plaintiff’s failure to make a timely motion, or to demonstrate that the
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`amendment would not be futile, would result in dismissal of the action with prejudice. Id.
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`Plaintiff did not proffer a proposed amended complaint within the period
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`prescribed by the Court, but instead attempted to file a motion for reconsideration, or in the
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`alternative leave to file an amended complaint, on February 27, 2017. (See Docket Entry No.
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`39.) The motion was not fully filed on the ECF system until May 10, 2017. (See Docket Entry
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`No. 45.) By letter submission dated October 18, 2017, Plaintiff proffered for the first time
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`images, described as “deposit copies,” of two of the allegedly registered watch designs that
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`include the registration numbers corresponding to the appropriate registration certificates,
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`claiming that counsel had received the images in May 2017. (Docket Entry No. 46.) Plaintiff’s
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`attorney represented that “burgeoning attorney-client relations issues resulted in the delay in
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`submitting the request for the deposit copies.” (Id. at 2.)
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`The Court denied Plaintiff’s motion for reconsideration and leave to amend,
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`concluding that Plaintiff had not demonstrated good cause, pursuant to Federal Rule of Civil
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`Procedure 16, for Plaintiff’s failure to comply with the Court’s orders in a timely fashion.
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`(Mem. Order, January 22, 2018, Docket Entry No. 51, at 7-8.) Specifically the Court found that
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`Plaintiff had not been diligent in its prosecution of the case, failing to take advantage of its three
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`opportunities to provide the requisite documentation to the Court and only proffering such
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`documentation six months after the final deadline, and that allowing an amendment at that point
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`in the litigation would prejudice the Defendants. (Id.)
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`Defendants seek $35,729.83 in attorneys’ fees for their successful defense of this
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`suit. (Dweck Supp. Aff., Docket Entry No. 69-1, ¶ 10.1) Sara Bar, Plaintiff’s founder, has
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`proffered a declaration that Plaintiff “is in an extremely difficult financial position,” has “lost
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`several major clients,” and has shed seven of its eight employees. (Bar Aff., Docket Entry No.
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`66, ¶¶ 31-32.) Bar further states that Plaintiff has “operated at a significant net loss, which
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`doubled from 2016 to 2017,” and that the imposition of attorneys’ fees “would cripple [the]
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`company and may even push it to bankruptcy,” and argues that a fee award would be
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`“inequitable” under these circumstances. (Id. ¶¶ 33-35.)
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`DISCUSSION
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`Section 505 provides that “[i]n any civil action under this title, the court in its
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`discretion may allow the recovery of full costs by or against any party other than the United
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`States or an officer thereof. Except as otherwise provided by this title, the court may also award
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`a reasonable attorney’s fee to the prevailing party as part of the costs.” 17 U.S.C.S. § 505
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`(LexisNexis 2011). Although there is “no precise rule or formula for making [attorneys’ fee]
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`determinations,” several non-exclusive factors may be considered in exercising discretion under
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`Section 505, including “frivolousness, motivation, objective unreasonableness (both in the
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`Defendants have moved for leave to file a supplemental affidavit documenting additional
`fees accrued in connection with their motion for attorneys’ fees and Plaintiff’s
`unsuccessful appeal of this Court’s judgment. (Docket Entry No. 69.) As Plaintiff has
`not objected to this request, the Court hereby grants it and has considered Defendants’
`supplemental affidavit.
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`factual and in the legal components of the case), and the need in particular circumstances to
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`advance considerations of compensation and deterrence.” Fogerty v. Fantasy, 510 U.S. 517, 534,
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`534 n.19 (1994) (quotation marks and citations omitted). Although the objective reasonableness
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`of a plaintiff’s claim is an important factor in a district court’s examination, it is not controlling.
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`Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979, 1988 (2016). A court must “take into
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`account a range of considerations beyond the reasonableness of litigating positions” and may
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`award fees to a defendant even if the plaintiff’s litigation position was objectively reasonable.
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`Id. at 1988-89.
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`These factors may guide courts’ discretion “so long as [they] are faithful to the
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`purposes of the Copyright Act and are applied to prevailing plaintiffs and defendants in an
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`evenhanded manner.” Fogerty, 510 U.S. at 534 n.19. The Copyright Act seeks to encourage the
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`production of creative expression and the expansion of public access to creative works. Id. at
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`526-27. In furtherance of this broad goal, the Copyright Act allows the shifting of fees to
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`incentivize parties with strong claims or defenses to “stand on their rights and deter[] [parties]
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`with weak [positions] from proceeding with litigation.” Kirtsaeng, 136 S. Ct. at 1986-87.
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`Defendants contend that they are entitled to attorneys’ fees because Plaintiff
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`failed to allege, either on the face of its complaint or through attached documentation, that it had
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`registered the allegedly infringed copyrights, which is a prerequisite for an infringement action,2
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`and then failed to avail itself of the numerous opportunities granted by this Court to provide such
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`documentation until after it filed its motion for reconsideration and well after its deadline to
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`move for leave to amend its complaint. Because Plaintiff was eventually able to provide the
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`deposit copies that appear to establish that at least two of the allegedly infringed designs were
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`See 17 U.S.C. § 411(a).
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`covered by copyright registrations,3 the Court is unable to conclude that Plaintiff’s claim was
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`objectively unreasonable. Nor does it appear that Plaintiff intentionally delayed the action to
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`inflict greater litigation costs on Defendants and extract concessions, although it is not clear why
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`Plaintiff did not tender the available registration information in a timely fashion. Plaintiff’s
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`principal appears to blame the delay on Plaintiff’s prior attorney; in the October 2017 letter
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`submitting the deposit copies, the former attorney represented that “burgeoning attorney-client
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`issues resulted in the delay in submitting the request for the deposit copies.” (See Docket Entry
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`No. 46; see also Bar Decl. ¶¶ 28-30.) What is clear is that the litigation was prolonged, and
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`ultimately derailed, by Plaintiff’s failure to provide basic information in support of its claim in a
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`timely fashion, despite numerous opportunities afforded to it by the Court.
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`The circumstances of this case warrant an award of attorneys’ fees to deter future
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`litigants from failing to attend diligently to their obligations, as well as to reimburse Defendants
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`for their inflated litigation costs and advance the goals of the Copyright Act. Defendants were
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`forced to incur increased litigation costs to accommodate Plaintiff’s counsel’s repeated failures
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`to produce documents that appear to have been available to Plaintiff. Cf. TufAmerica Inc. v.
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`Diamond, No. 12-CV-3529 (AJN), 2018 WL 401510, at *4 (S.D.N.Y. Jan. 12, 2018) (finding a
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`need to deter the filing of inadequately-investigated frivolous lawsuits). Furthermore, the
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`purposes of the fee shifting provision of the Copyright Act, namely to deter parties that are
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`unlikely to prevail from prolonging litigation, would be undermined by denying an award where
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`the plaintiff increased the costs and delay associated with defending an action that was
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`eventually dismissed on account of the plaintiff’s lackadaisical response to the Court’s repeated
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`Defendants do not dispute that the deposit copies eventually filed by Plaintiff include
`graphical representations of the allegedly infringed upon designs and references to
`copyright registration certificates.
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`orders to produce rudimentary information in support of a basic element of its claim. Cf.
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`Kirtsaeng, 136 S. Ct. at 1986-87.
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`Plaintiff argues that fees should not be imposed because its financial condition is
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`weak. See Barclays Capital Inc. v. Theflyonthewall.com, No. 06 CIV. 4908 (DLC), 2010 WL
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`2640095, at *6-7 (S.D.N.Y. June 30, 2010) (finding that an equitable reduction in attorneys’ fees
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`was warranted based upon the economic disparity between the two parties); see also Shangold v.
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`Walt Disney Co., No. 03 CIV 9522 WHP, 2006 WL 2884925, at *1 (S.D.N.Y. Oct. 11,
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`2006), aff'd, 275 F. App'x 72 (2d Cir. 2008) (citing Toliver v. County of Sullivan, 957 F.2d 47,
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`49-50 (2d Cir. 1992) (“In deciding the amount of fees and costs to award, courts may consider a
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`party’s financial circumstances.”). In connection with this argument, Plaintiff proffers only its
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`principal’s representations that Plaintiff’s losses increased and employee census decreased
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`significantly from 2016 to 2017, and that the $26,372.08 award initially requested by Defendants
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`“would cripple [the] company and may even push it to bankruptcy.” (Bar Decl. ¶ 34.) This
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`information is too vague and conclusory to demonstrate that Plaintiff would ultimately be unable
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`to pay the award, or that imposition of an award would be inequitable in light of Plaintiff’s
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`conduct and the public policy considerations discussed above. See TufAmerica, 2018 WL
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`401510, at *6 (finding that a reduction in fees was not warranted because the reduced sum would
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`not serve as an adequate deterrent); see also Harrell v. Van der Plas, No. 08 CIV. 8252 (GEL),
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`2009 WL 3756327, at *7 (S.D.N.Y. Nov. 9, 2009) (declining to reduce fees where defendant
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`opposing such fees failed to provide sufficient support for “a conclusion that there is a
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`substantial disparity in the financial strength of the parties such that defendants may avoid
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`paying plaintiff’s fees”).
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`Accordingly, the Court will award Defendants their reasonable attorneys’ fees
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`pursuant to Section 505.
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`The Court next turns to the reasonableness of Defendants’ requested fees. “A
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`district court has ‘considerable discretion’ in determining what constitutes a reasonable fee
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`award,” which “should be based on a ‘reasonable hourly rate,’” or “‘the rate a paying client
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`would be willing to pay,’ as determined based on a holistic assessment of all of the
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`circumstances at issue in the case.” Trustees of New York City Dist. Council of Carpenters
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`Pension Fund, Welfare Fund, Annuity Fund v. Vintage Tile & Flooring, Inc., No. 14-CV-06450
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`KBF, 2015 WL 3797273, at *6 (S.D.N.Y. June 18, 2015) (quoting Arbor Hill Concerned
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`Citizens Neighborhood Ass’n v. Cnty. of Albany, 522 F.3d 182, 190 (2d Cir.2008)). A
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`“reasonable hourly rate” should also correspond with the prevailing rates “‘in the community for
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`similar services by lawyers of reasonably comparable skill[,] expertise and reputation.’” Id.
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`(quoting McDonald ex rel. Prendergast v. Pension Plan of the NYSA–ILA Pension Tr. Fund, 450
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`F.3d 91, 96 (2d Cir.2006)).
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`Defendants proffer contemporaneous time records in support of their application
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`that specify the date, hours expended, and nature of the work done for each attorney who has
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`prosecuted this action. (Docket Entry Nos. 55-3 and 69-2.) The hourly rates, $275 per hour for a
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`junior associate, $325 per hour for a senior associate, and $450 per hour for a senior partner, are
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`reasonable in light of attorneys’ fee awards granted in other copyright actions in this district.
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`See, e.g., Yurman Designs, Inc. v. PAJ, Inc., 125 F. Supp. 2d 54, 58 (S.D.N.Y. 2000) (S.D.N.Y.
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`2000) (granting attorneys’ fees application based on a $520.69/hour rate for a partner and
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`$278.50/hour rate for an associate); (Docket Entry No. 55-3, ¶ 13). The Court has reviewed
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`carefully the Defendants’ proffered contemporaneous time records and finds Defendants’
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`request, including the hours expended and nature of the work done, is reasonable, and is
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`adequately supported by documentation. The original and supplemental declarations appear,
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`however, to duplicate each other with respect to time and charges incurred during the month of
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`January 2018 in connection with the preparation of Defendants’ opening papers on this motion
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`practice. (Compare January 30, 2018 Aff., Docket Entry 55, ¶ 17 (requesting an additional
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`$5,775.00 for time spent “[o]n the present motion” in addition to $20,597.08 charged through
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`December 31, 2017) with Docket Entry No. 69-2 (invoice for $5,525.00 for services rendered in
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`January 2018 including preparation of motion for attorneys’ fees).) Accordingly, the Court
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`reduces the requested amount by $5,775.00 and awards Defendants attorneys’ fees and related
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`expenses in the total amount of $29,954.83.
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`CONCLUSION
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`For the foregoing reasons, Defendants’ motion for attorneys’ fees and expenses is
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`granted in the total sum of $29,954.83. The Clerk of Court is requested to enter an Amended
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`Judgment reflecting the foregoing award.
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`This Memorandum Order resolves Docket Entry Nos. 54 and 69.
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`SO ORDERED.
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`Dated: New York, New York
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`June 13, 2018
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` /s/ Laura Taylor Swain
`LAURA TAYLOR SWAIN
`United States District Judge
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`MOT. FOR ATTORNEYS' FEES
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`VERSION JUNE 12, 2018
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