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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF NEW YORK
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`DAVID WILLIAM MORAN,
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`Plaintiff,
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`
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`v.
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`DESIGNET INTERNATIONAL,
`REG MEDICOTT SCHOPP,
`RARU.COM, INC.,
`KIMBERLY ANN SCHOPP,
`ROBERT KOPF, ROMAN JURGA,
`ELIZABETH CALI, and MICHAEL
`SCHOPP,
`
`Defendants.
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` DECISION AND ORDER
` 05-CV-459S
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`I. INTRODUCTION
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`Plaintiff, David William Moran, commenced this action against Defendants,
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`deSignet International (“deSignet”) and several of its employees, alleging claims for breach
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`of contract and violations of the Copyright Act, 17 U.S.C. §§ 101 et seq. On March 19,
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`2010, this Court accepted the Honorable Hugh B. Scott’s Report and Recommendation
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`(“R&R”), which recommended summary judgment in favor of the Defendants. (Docket Nos.
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`70, 71.) Presently before this Court is Defendants’ Motion for Attorney Fees pursuant to
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`Section 505 of the Copyright Act. For the following reasons, Defendants’ motion is denied.
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`A. Facts1
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`II. BACKGROUND
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`On March 3, 2000, Moran emailed deSignet, a manufacturer and designer of
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`wedding and engagement rings and bands, and asked if it would develop a wedding ring
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`based on a design that he created. (Magistrate Scott’s R&R, p. 2; Docket No. 70.) deSignet
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`1For a full discussion of the facts, see Judge Scott’s Report and Recommendation, pp. 1-5.
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`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 2 of 9
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`agreed, but also asked Moran if it could purchase the design. (Id.) Moran declined the offer
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`but, pursuant to their original agreement, presented his design to deSignet on March 4,
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`2000. (Id.) Soon thereafter, his design (the “Moran Knot”), was granted a copyright and
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`registered with the Library of Congress, bearing the number “V Au-497-855.” (Id., p. 1.) His
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`design is pictured below.
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`(Id., p. 3)
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`Subsequently, on two separate occasions, in April of 2000 and January of 2002,
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`Moran asserted that deSignet violated this copyright by offering for sale on its website a
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`design it alternatively called “The Waterfront Knot” and “The Kenmore Knot.” (Id., p. 5) That
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`design appears as follows:
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`(Id.)
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`deSignet claimed that its design was not based on the Moran Knot but on a book
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`entitled Celtic Art: The Methods of Construction, by George Bain. (Id., p. 2.) Bain’s book
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`depicts hundreds of Celtic designs which were originally contained in the “Book of Kells,”
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`an ancient Celtic text published around 800 A.D., and undisputedly in the public domain.
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`(Id., p. 3.) Specifically, deSignet claimed its design was based on this knot, found in the
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`Book of Kells:
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`2
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`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 3 of 9
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`
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`(Id.)
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`In resolving Defendants’ motion for summary judgment, Judge Scott ultimately found
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`that many of the features of the Moran Knot were in the public domain and that “[i]f you
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`modify the elements which distinguish the Moran Knot from the knot in the Book of Kells,
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`you are left with the Kenmore Knot.” (Id., p 12.) He further explained, “The modifications
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`which [Moran] alleges were made by the defendants to the Moran Knot, effectively
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`removed those elements which distinguished the Moran Knot from the design in the Book
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`of Kells. (Id.) Finally, he concluded, “in designing the Kenmore Knot[,] the defendants, in
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`essence, removed the protectable elements of the Moran design.” (Id.) Thus, because
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`DeSignet’s design did not infringe on protectable elements of the Moran Knot, Judge Scott
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`recommended, and this Court ordered, summary judgement in favor of the Defendants.
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`B.
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`Procedural History
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`Moran commenced this action by filing a complaint in this Court on June 29, 2005.
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`(Docket No. 1.) On May 23, 2006, Defendants answered and filed a counterclaim against
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`Moran. (Docket No. 5.) Judge Scott granted Moran leave to file an amended complaint on
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`May 16, 2008, and Moran filed his new complaint eleven days later. (Docket Nos. 41, 44.)
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`Defendants answered and re-asserted their counterclaim on June 16, 2008. (Docket No.
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`45.) Subsequently, on April 6, 2009, Defendants moved for summary judgment and Judge
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`Scott issued a Report and Recommendation recommending that this Court grant the
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`motion with respect to Moran’s copyright claim on February 11, 2010. (Docket No. 70.)
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`3
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`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 4 of 9
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`Neither party objected to the R&R and this Court agreed with the Judge’s reasoning; thus
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`it ordered summary judgment in favor of Defendants. (Docket No. 71.)
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`After mediation, the parties held a status conference where Moran withdrew his
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`breach of contract claim and Defendants withdrew their counterclaim. (Docket No. 84.)
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`Defendants’ motion for attorney fees in the amount of $108,453.01 is all that remains of
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`this litigation.
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`A.
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`Legal Standard
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`III. DISCUSSION
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`Section 505 of the Copyright Act provides:
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`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
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`17 U.S.C. § 505.
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`Costs and attorney fees for prevailing parties under § 505 “are not automatic.”
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`Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc., 290 F.3d 98, 117 (2d Cir. 2002).
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`Rather, they are a matter for a district court's “equitable discretion.” Id.; see also Fogerty
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`v. Fantasy, Inc., 510 U.S. 517, 534, 114 S. Ct. 1023, 127 L. Ed. 2d 455 (1994)
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`(“[A]ttorney's fees are to be awarded to prevailing parties only as a matter of the court's
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`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).
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`4
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`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 5 of 9
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`discretion.”); 17 U.S.C. § 505 (“[T]he court in its discretion may allow the recovery of full
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`costs[.]”) (emphasis added).
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`“When determining whether to award attorneys fees, district courts may consider
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`such factors as (1) the frivolousness of the non-prevailing party's claims or defenses; (2)
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`the party's motivation; (3) whether the claims or defenses were objectively unreasonable;
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`and (4) compensation and deterrence.” Bryant v. Media Right Prods., Inc., 603 F.3d 135,
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`144 (2d Cir. 2010) (citing Fogerty, 510 U.S. at 534, n. 19). These factors, which are not
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`exclusive, and any others weighed by a district court, must be applied in a manner “faithful
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`to the purposes of the Copyright Act.” Fogerty, 510 U.S. at 525. Those purposes include
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`encouraging the production of “original literary, artistic, and musical expression for the
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`good of the public.” Id. at 534, n. 19. In this Circuit, “[t]he third factor – objective
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`unreasonableness – should be given substantial weight.” Bryant, 603 F.3d at 144. “Only
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`those claims that are clearly without merit or otherwise patently devoid of legal or factual
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`basis ought to be deemed objectively unreasonable.” Silberstein v. Fox Entm't Grp., Inc.,
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`536 F. Supp. 2d 440, 444 (S.D.N.Y.2008).
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`1.
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`Objective Reasonableness
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`As an initial matter, this court cannot conclude that most important element –
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`objective unreasonableness – has been met.3 The record establishes that Moran did have
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`a copyright on his design and that Defendants created a very similar design and offered
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`it for sale on their website. In fact, Judge Scott’s R&R recognized the similarities in the two
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`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
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`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 6 of 9
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`designs, but found that the they were all in the public domain. (See R&R, p. 13) (“[T]he
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`similarity between the two works concerns only non-copyrightable elements of the plaintiff’s
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`work.”) Such a conclusion required a close scrutiny of the two works and a careful division
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`of their respective elements. As such, Moran’s claim cannot be deemed objectively
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`unreasonable.
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`Defendants’ actions prior to this lawsuit further support the reasonableness of
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`Moran’s claim. First, when Moran initially presented his design to Defendants, they offered
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`to purchase it, signaling to Moran that the work was original and not in the public domain.
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`By making such an offer, it “would appear to indicate that defendants themselves did not
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`view plaintiff’s copyright claim as specious.” Silberstein, 536 F. Supp. 2d at 444.
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`Second, when Moran first learned that Defendants were selling the “Waterfront
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`Knot” in 2000, he contacted them, and citing his copyright for the work, asked them to
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`remove it from their website. (Id., pp. 4-5.) Defendants complied with this request. (Id.)
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`Although this fact has no bearing on the merits of Moran’s claim, it does assist this Court
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`in ascertaining Moran’s mind set when he ultimately decided to file suit. His belief that he
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`owned the copyright to his design must have been reinforced when Defendants complied
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`with his request. Then, when he saw the same design reemerge on Defendants’ website
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`two years later, it was not unreasonable for him to conclude that, this time, he needed to
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`file suit to protect what he believed was properly his. As such, it cannot be said that
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`Moran’s claim was “clearly without merit or otherwise patently devoid of legal or factual
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`basis.4 Silberstein, 536 F. Supp. 2d at 444.
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`4In this Court’s view, such a finding must also lead to the conclusion that Moran’s claim was not
`frivolous.
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`6
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`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 7 of 9
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`2.
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`Bad Faith
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`Defendants, however, argue that Moran’s claim was asserted in bad faith. “As the
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`Second Circuit has elsewhere defined bad faith, the term is somewhat different than
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`objective unreasonableness.” Canal+ Image UK Ltd. v. Lutvak,---- F. Supp. 2d ----, No. 10
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`Civ. 1536 2011, WL 2396961, at *9 (S.D.N.Y. June 8, 2011). “In order to award bad faith
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`fees, the district court must find that the losing party's claim was (1) meritless; and (2)
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`brought for improper purposes such as harassment or delay.” Id. (quoting Kerin v. United
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`States Postal Service, 218 F.3d 185, 190 (2d Cir.2000). “The test is conjunctive and neither
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`meritlessness alone nor improper purpose alone will suffice.” Id. (quoting Sierra Club v.
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`United States Army Corps of Eng'rs, 776 F.2d 383, 390 (2d Cir.1985)).
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`Defendants argue that Moran’s work was not original and that his copyright is
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`fraudulent. They contend that they have found a design that is true source of Moran's knot
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`in a book by Aiden Meehan (“Meehan Knot”). (Moore Affidavit, ¶ 3; Docket No. 85-2.) A
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`representation of the Meehan Knot follows:
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`(Schopp Affidavit, Exhibit A; Docket No. 85-3)
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`Defendants argue that Moran doubled the Meehan Knot, flipped it on its side and
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`combined the two to form the Moran Knot, thus rendering it a derivative work subject to
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`more limited protections under the Copyright Act. They also point to a letter that they
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`recently discovered from Reg Medicott Schopp, President of deSignet, to his attorney, in
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`7
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`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 8 of 9
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`which Schopp indicates that Moran told him in 2000 that the inspiration for his knot came
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`from a book about Celtic Knots. (Schopp Affidavit, Exhibit E, Docket No. 62-6.) This is
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`contrary to Moran’s claim throughout this litigation that he arrived at the design
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`independently.
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`Yet, these speculative allegations, based partially on hearsay, do not outweigh the
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`main piece of evidence in favor of the originality of Moran’s design: his copyright. See
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`Boisson v. Banian, Ltd., 273 F.3d 262, 268. (“Plaintiffs' certificates of registration constitute
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`prima facie evidence of the validity not only of their copyrights, but also of the originality of
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`their works.”) Further, because “[a]ll creative works draw on the common wellspring that
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`is the public domain,” see Tufenkian Import/Export Ventures, Inc. v. Einstein Moomjy, Inc.,
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`338 F.3d 127, 132 (2d Cir. 2003), this Court is unpersuaded that Moran’s alleged
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`manipulation of the Meehan Knot necessarily renders his claim meritless or frivolous.
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`Finally, Defendants do not, as they must, point to any specific improper motive that
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`inspired Moran to bring this suit. In fact, the only evidence concerning Moran’s motivation
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`comes from Moran himself, who has stated that his only goal was to keep the design
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`exclusive to his family. (Moran Deposition, p. 73: Docket No. 66-3.)
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`3.
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`Remaining Factors
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`Defendants also argue that they are entitled to attorney fees due to the small size
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`of their company and the financial burden that this litigation caused.
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`Compensating defendants, and by extension deterring plaintiffs, may be proper
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`where a defendant is required to defend against willful infringement or objectively
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`unreasonably claims. See U2 Home Entm’t, Inc. v. Hong Wei Int’l Trading, Inc., No. 04 Civ.
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`6189, 2008 WL 3906889, at *17 (S.D.N.Y. Aug. 21, 2008) (collecting cases); Muller v.
`8
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`Case 1:05-cv-00459-WMS-HBS Document 89 Filed 11/27/11 Page 9 of 9
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`Twentieth Century Fox Film Corp., No. 08 Civ. 2550, 2011 WL 3678712, at *3 (S.D.N.Y.
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`Aug. 22, 2011). However, this Court finds that a fee award in this case, where a copyright
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`holder filed an objectively reasonable claim, would not be faithful to the purposes of the
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`Copyright Act, which is meant to encourage the origination of creative rights. See Matthew
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`Bender & Co. Inc,. v. West Publ’g Co., 240 F.3d 116, 122 (2d Cir. 2001). (“[T]he imposition
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`of a fee award against a copyright holder with an objectively reasonable litigation position
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`will generally not promote the purposes of the Copyright Act.”). In other words, Defendants’
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`financial position, in this Court’s equitable discretion, does not overcome the more
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`significant factors that weigh in favor of refusing a fee award. Consequently, Defendants’
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`motion is denied.
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`IV. CONCLUSION
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`For the reasons discussed above, Defendants’ motion is denied.
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`V. ORDERS
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`IT HEREBY IS ORDERED, that Defendants’ Motion for Attorney Fees (Docket No.
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`85) is DENIED.
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`FURTHER, that the Clerk of the Court shall close this case.
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`Dated:
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`November 18, 2011
`Buffalo, New York
`
` /s/William M. Skretny
`WILLIAM M. SKRETNY
` Chief Judge
` United States District Court
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`9