Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 1 of 9
`
`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF NEW YORK
`
`DAVID WILLIAM MORAN,
`
`Plaintiff,
`
`
`
`v.
`
`DESIGNET INTERNATIONAL,
`REG MEDICOTT SCHOPP,
`RARU.COM, INC.,
`KIMBERLY ANN SCHOPP,
`ROBERT KOPF, ROMAN JURGA,
`ELIZABETH CALI, and MICHAEL
`SCHOPP,
`
`Defendants.
`
` DECISION AND ORDER
` 05-CV-459S
`
`I. INTRODUCTION
`
`Plaintiff, David William Moran, commenced this action against Defendants,
`
`deSignet International (“deSignet”) and several of its employees, alleging claims for breach
`
`of contract and violations of the Copyright Act, 17 U.S.C. §§ 101 et seq. On March 19,
`
`2010, this Court accepted the Honorable Hugh B. Scott’s Report and Recommendation
`
`(“R&R”), which recommended summary judgment in favor of the Defendants. (Docket Nos.
`
`70, 71.) Presently before this Court is Defendants’ Motion for Attorney Fees pursuant to
`
`Section 505 of the Copyright Act. For the following reasons, Defendants’ motion is denied.
`
`A. Facts1
`
`II. BACKGROUND
`
`On March 3, 2000, Moran emailed deSignet, a manufacturer and designer of
`
`wedding and engagement rings and bands, and asked if it would develop a wedding ring
`
`based on a design that he created. (Magistrate Scott’s R&R, p. 2; Docket No. 70.) deSignet
`
`1For a full discussion of the facts, see Judge Scott’s Report and Recommendation, pp. 1-5.
`
`

`
`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 2 of 9
`
`agreed, but also asked Moran if it could purchase the design. (Id.) Moran declined the offer
`
`but, pursuant to their original agreement, presented his design to deSignet on March 4,
`
`2000. (Id.) Soon thereafter, his design (the “Moran Knot”), was granted a copyright and
`
`registered with the Library of Congress, bearing the number “V Au-497-855.” (Id., p. 1.) His
`
`design is pictured below.
`
`(Id., p. 3)
`
`Subsequently, on two separate occasions, in April of 2000 and January of 2002,
`
`Moran asserted that deSignet violated this copyright by offering for sale on its website a
`
`design it alternatively called “The Waterfront Knot” and “The Kenmore Knot.” (Id., p. 5) That
`
`design appears as follows:
`
`(Id.)
`
`deSignet claimed that its design was not based on the Moran Knot but on a book
`
`entitled Celtic Art: The Methods of Construction, by George Bain. (Id., p. 2.) Bain’s book
`
`depicts hundreds of Celtic designs which were originally contained in the “Book of Kells,”
`
`an ancient Celtic text published around 800 A.D., and undisputedly in the public domain.
`
`(Id., p. 3.) Specifically, deSignet claimed its design was based on this knot, found in the
`
`Book of Kells:
`
`2
`
`

`
`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 3 of 9
`
`
`
`(Id.)
`
`In resolving Defendants’ motion for summary judgment, Judge Scott ultimately found
`
`that many of the features of the Moran Knot were in the public domain and that “[i]f you
`
`modify the elements which distinguish the Moran Knot from the knot in the Book of Kells,
`
`you are left with the Kenmore Knot.” (Id., p 12.) He further explained, “The modifications
`
`which [Moran] alleges were made by the defendants to the Moran Knot, effectively
`
`removed those elements which distinguished the Moran Knot from the design in the Book
`
`of Kells. (Id.) Finally, he concluded, “in designing the Kenmore Knot[,] the defendants, in
`
`essence, removed the protectable elements of the Moran design.” (Id.) Thus, because
`
`DeSignet’s design did not infringe on protectable elements of the Moran Knot, Judge Scott
`
`recommended, and this Court ordered, summary judgement in favor of the Defendants.
`
`B.
`
`Procedural History
`
`Moran commenced this action by filing a complaint in this Court on June 29, 2005.
`
`(Docket No. 1.) On May 23, 2006, Defendants answered and filed a counterclaim against
`
`Moran. (Docket No. 5.) Judge Scott granted Moran leave to file an amended complaint on
`
`May 16, 2008, and Moran filed his new complaint eleven days later. (Docket Nos. 41, 44.)
`
`Defendants answered and re-asserted their counterclaim on June 16, 2008. (Docket No.
`
`45.) Subsequently, on April 6, 2009, Defendants moved for summary judgment and Judge
`
`Scott issued a Report and Recommendation recommending that this Court grant the
`
`motion with respect to Moran’s copyright claim on February 11, 2010. (Docket No. 70.)
`
`3
`
`

`
`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 4 of 9
`
`Neither party objected to the R&R and this Court agreed with the Judge’s reasoning; thus
`
`it ordered summary judgment in favor of Defendants. (Docket No. 71.)
`
`After mediation, the parties held a status conference where Moran withdrew his
`
`breach of contract claim and Defendants withdrew their counterclaim. (Docket No. 84.)
`
`Defendants’ motion for attorney fees in the amount of $108,453.01 is all that remains of
`
`this litigation.
`
`A.
`
`Legal Standard
`
`III. DISCUSSION
`
`Section 505 of the Copyright Act provides:
`
`In 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.2
`
`17 U.S.C. § 505.
`
`Costs and attorney fees for prevailing parties under § 505 “are not automatic.”
`
`Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc., 290 F.3d 98, 117 (2d Cir. 2002).
`
`Rather, they are a matter for a district court's “equitable discretion.” Id.; see also Fogerty
`
`v. Fantasy, Inc., 510 U.S. 517, 534, 114 S. Ct. 1023, 127 L. Ed. 2d 455 (1994)
`
`(“[A]ttorney's fees are to be awarded to prevailing parties only as a matter of the court's
`
`2There is no dispute that Defendants are the prevailing parties. Although at one time it was unclear
`whether successful defendants were entitled to attorney fees, it is now settled that “a defendant who prevails
`in a copyright action may be awarded attorney’s fees under 17 U.S.C. § 505.” Polsby v. St. Martin’s Press,
`Inc., 8 F. App’x. 90, 92 (2d Cir. 2001); see also Fogerty v. Fantasy, Inc., 510 U.S. 517, 114 S. Ct. 1023, 127
`L. Ed. 2d 455 (1994) (finding that prevailing defendants and plaintiffs should be treated with an “evenhanded”
`approach).
`
`4
`
`

`
`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 5 of 9
`
`discretion.”); 17 U.S.C. § 505 (“[T]he court in its discretion may allow the recovery of full
`
`costs[.]”) (emphasis added).
`
`“When determining whether to award attorneys fees, district courts may consider
`
`such factors as (1) the frivolousness of the non-prevailing party's claims or defenses; (2)
`
`the party's motivation; (3) whether the claims or defenses were objectively unreasonable;
`
`and (4) compensation and deterrence.” Bryant v. Media Right Prods., Inc., 603 F.3d 135,
`
`144 (2d Cir. 2010) (citing Fogerty, 510 U.S. at 534, n. 19). These factors, which are not
`
`exclusive, and any others weighed by a district court, must be applied in a manner “faithful
`
`to the purposes of the Copyright Act.” Fogerty, 510 U.S. at 525. Those purposes include
`
`encouraging the production of “original literary, artistic, and musical expression for the
`
`good of the public.” Id. at 534, n. 19. In this Circuit, “[t]he third factor – objective
`
`unreasonableness – should be given substantial weight.” Bryant, 603 F.3d at 144. “Only
`
`those claims that are clearly without merit or otherwise patently devoid of legal or factual
`
`basis ought to be deemed objectively unreasonable.” Silberstein v. Fox Entm't Grp., Inc.,
`
`536 F. Supp. 2d 440, 444 (S.D.N.Y.2008).
`
`1.
`
`Objective Reasonableness
`
`As an initial matter, this court cannot conclude that most important element –
`
`objective unreasonableness – has been met.3 The record establishes that Moran did have
`
`a copyright on his design and that Defendants created a very similar design and offered
`
`it for sale on their website. In fact, Judge Scott’s R&R recognized the similarities in the two
`
`3Defendants are not entitled to attorney fees merely because they prevailed on summary judgment.
`See Silberstein, 536 F. Supp. at 443. (“Prevailing parties are not entitled to fees merely because they have
`been successful on a motion to dismiss or for summary judgment. To do so would establish a per se
`entitlement of attorney's fees whenever issues pertaining to judgment are resolved against a copyright plaintiff.
`This is not a correct construction of the law.”) (internal quotation marks and citations omitted.)
`5
`
`

`
`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 6 of 9
`
`designs, but found that the they were all in the public domain. (See R&R, p. 13) (“[T]he
`
`similarity between the two works concerns only non-copyrightable elements of the plaintiff’s
`
`work.”) Such a conclusion required a close scrutiny of the two works and a careful division
`
`of their respective elements. As such, Moran’s claim cannot be deemed objectively
`
`unreasonable.
`
`Defendants’ actions prior to this lawsuit further support the reasonableness of
`
`Moran’s claim. First, when Moran initially presented his design to Defendants, they offered
`
`to purchase it, signaling to Moran that the work was original and not in the public domain.
`
`By making such an offer, it “would appear to indicate that defendants themselves did not
`
`view plaintiff’s copyright claim as specious.” Silberstein, 536 F. Supp. 2d at 444.
`
`Second, when Moran first learned that Defendants were selling the “Waterfront
`
`Knot” in 2000, he contacted them, and citing his copyright for the work, asked them to
`
`remove it from their website. (Id., pp. 4-5.) Defendants complied with this request. (Id.)
`
`Although this fact has no bearing on the merits of Moran’s claim, it does assist this Court
`
`in ascertaining Moran’s mind set when he ultimately decided to file suit. His belief that he
`
`owned the copyright to his design must have been reinforced when Defendants complied
`
`with his request. Then, when he saw the same design reemerge on Defendants’ website
`
`two years later, it was not unreasonable for him to conclude that, this time, he needed to
`
`file suit to protect what he believed was properly his. As such, it cannot be said that
`
`Moran’s claim was “clearly without merit or otherwise patently devoid of legal or factual
`
`basis.4 Silberstein, 536 F. Supp. 2d at 444.
`
`4In this Court’s view, such a finding must also lead to the conclusion that Moran’s claim was not
`frivolous.
`
`6
`
`

`
`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 7 of 9
`
`2.
`
`Bad Faith
`
`Defendants, however, argue that Moran’s claim was asserted in bad faith. “As the
`
`Second Circuit has elsewhere defined bad faith, the term is somewhat different than
`
`objective unreasonableness.” Canal+ Image UK Ltd. v. Lutvak,---- F. Supp. 2d ----, No. 10
`
`Civ. 1536 2011, WL 2396961, at *9 (S.D.N.Y. June 8, 2011). “In order to award bad faith
`
`fees, the district court must find that the losing party's claim was (1) meritless; and (2)
`
`brought for improper purposes such as harassment or delay.” Id. (quoting Kerin v. United
`
`States Postal Service, 218 F.3d 185, 190 (2d Cir.2000). “The test is conjunctive and neither
`
`meritlessness alone nor improper purpose alone will suffice.” Id. (quoting Sierra Club v.
`
`United States Army Corps of Eng'rs, 776 F.2d 383, 390 (2d Cir.1985)).
`
`Defendants argue that Moran’s work was not original and that his copyright is
`
`fraudulent. They contend that they have found a design that is true source of Moran's knot
`
`in a book by Aiden Meehan (“Meehan Knot”). (Moore Affidavit, ¶ 3; Docket No. 85-2.) A
`
`representation of the Meehan Knot follows:
`
`(Schopp Affidavit, Exhibit A; Docket No. 85-3)
`
`Defendants argue that Moran doubled the Meehan Knot, flipped it on its side and
`
`combined the two to form the Moran Knot, thus rendering it a derivative work subject to
`
`more limited protections under the Copyright Act. They also point to a letter that they
`
`recently discovered from Reg Medicott Schopp, President of deSignet, to his attorney, in
`
`7
`
`

`
`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 8 of 9
`
`which Schopp indicates that Moran told him in 2000 that the inspiration for his knot came
`
`from a book about Celtic Knots. (Schopp Affidavit, Exhibit E, Docket No. 62-6.) This is
`
`contrary to Moran’s claim throughout this litigation that he arrived at the design
`
`independently.
`
`Yet, these speculative allegations, based partially on hearsay, do not outweigh the
`
`main piece of evidence in favor of the originality of Moran’s design: his copyright. See
`
`Boisson v. Banian, Ltd., 273 F.3d 262, 268. (“Plaintiffs' certificates of registration constitute
`
`prima facie evidence of the validity not only of their copyrights, but also of the originality of
`
`their works.”) Further, because “[a]ll creative works draw on the common wellspring that
`
`is the public domain,” see Tufenkian Import/Export Ventures, Inc. v. Einstein Moomjy, Inc.,
`
`338 F.3d 127, 132 (2d Cir. 2003), this Court is unpersuaded that Moran’s alleged
`
`manipulation of the Meehan Knot necessarily renders his claim meritless or frivolous.
`
`Finally, Defendants do not, as they must, point to any specific improper motive that
`
`inspired Moran to bring this suit. In fact, the only evidence concerning Moran’s motivation
`
`comes from Moran himself, who has stated that his only goal was to keep the design
`
`exclusive to his family. (Moran Deposition, p. 73: Docket No. 66-3.)
`
`3.
`
`Remaining Factors
`
`Defendants also argue that they are entitled to attorney fees due to the small size
`
`of their company and the financial burden that this litigation caused.
`
`Compensating defendants, and by extension deterring plaintiffs, may be proper
`
`where a defendant is required to defend against willful infringement or objectively
`
`unreasonably claims. See U2 Home Entm’t, Inc. v. Hong Wei Int’l Trading, Inc., No. 04 Civ.
`
`6189, 2008 WL 3906889, at *17 (S.D.N.Y. Aug. 21, 2008) (collecting cases); Muller v.
`8
`
`

`
`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 9 of 9
`
`Twentieth Century Fox Film Corp., No. 08 Civ. 2550, 2011 WL 3678712, at *3 (S.D.N.Y.
`
`Aug. 22, 2011). However, this Court finds that a fee award in this case, where a copyright
`
`holder filed an objectively reasonable claim, would not be faithful to the purposes of the
`
`Copyright Act, which is meant to encourage the origination of creative rights. See Matthew
`
`Bender & Co. Inc,. v. West Publ’g Co., 240 F.3d 116, 122 (2d Cir. 2001). (“[T]he imposition
`
`of a fee award against a copyright holder with an objectively reasonable litigation position
`
`will generally not promote the purposes of the Copyright Act.”). In other words, Defendants’
`
`financial position, in this Court’s equitable discretion, does not overcome the more
`
`significant factors that weigh in favor of refusing a fee award. Consequently, Defendants’
`
`motion is denied.
`
`IV. CONCLUSION
`
`For the reasons discussed above, Defendants’ motion is denied.
`
`V. ORDERS
`
`IT HEREBY IS ORDERED, that Defendants’ Motion for Attorney Fees (Docket No.
`
`85) is DENIED.
`
`FURTHER, that the Clerk of the Court shall close this case.
`
`Dated:
`
`November 18, 2011
`Buffalo, New York
`
` /s/William M. Skretny
`WILLIAM M. SKRETNY
` Chief Judge
` United States District Court
`
`9