Case 2:07-cv-00382-TSZ Document 123 Filed 01/20/09 Page 1 of 7
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
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`Case No. C07-382Z
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`ORDER
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`MODULAR ARTS, INC., a
`Washington corporation,
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`Plaintiff,
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`v.
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`INTERLAM CORPORATION, a
`Florida Corporation, d/b/a
`INTERLAM, and INTERLAM,
`INC.,
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`Defendant.
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`BACKGROUND
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`On March 13, 2007, Modular Arts filed a complaint against Interlam alleging
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`copyright infringement. Compl., docket no. 1. On February 28, 2008, after a three day
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`trial, the jury returned a defense verdict. Jury Verdict, docket no. 72. As a result,
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`Plaintiff’s amended complaint was dismissed with prejudice and with costs.
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`Supplemental Judgment, docket no. 74. On March 18, 2008, Interlam filed a motion
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`ORDER
`PAGE - 1
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
`
`
`Case No. C07-382Z
`
`ORDER
`
`MODULAR ARTS, INC., a
`Washington corporation,
`
`Plaintiff,
`
`v.
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`
`
`
`
`
`INTERLAM CORPORATION, a
`Florida Corporation, d/b/a
`INTERLAM, and INTERLAM,
`INC.,
`
`Defendant.
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`
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`BACKGROUND
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`On March 13, 2007, Modular Arts filed a complaint against Interlam alleging
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`copyright infringement. Compl., docket no. 1. On February 28, 2008, after a three day
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`trial, the jury returned a defense verdict. Jury Verdict, docket no. 72. As a result,
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`Plaintiff’s amended complaint was dismissed with prejudice and with costs.
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`Supplemental Judgment, docket no. 74. On March 18, 2008, Interlam filed a motion
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`ORDER
`PAGE - 1
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`Case 2:07-cv-00382-TSZ Document 123 Filed 01/20/09 Page 2 of 7
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`for attorney’s fees and costs, docket no. 76. The Court denied Interlam’s motion for
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`attorney’s fees and costs by Minute Order, docket no. 98. The Clerk of the Court then
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`granted Interlam’s motion for Bill of Costs, docket no. 121. Interlam appealed the
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`denial of attorney’s fees and costs to the Ninth Circuit. Notice of Appeal, docket no.
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`103. On appeal, both sides jointly moved to have this Court set forth the basis for its
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`decision denying attorney’s fees and costs and the Ninth Circuit granted that motion.
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`Modular Arts, Inc., v. Interlam Corp., Case No. 08-35489, Order, docket no. 7.
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`Mandate then issued. Id., docket no. 8. The Court now sets forth the reasoning
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`underlying the Minute Order, docket no. 98.
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`DISCUSSION
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`A. STANDARD FOR AWARD OF ATTORNEY’S FEES
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`The Copyright Act states that “the court may also award a reasonable attorney’s
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`fee to the prevailing party as part of the costs.” 17 U.S.C. § 505. The award of
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`attorney’s fees is a matter for the district court’s discretion. Perfect 10, Inc. v. CCBill
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`LLC, 488 F.3d 1102, 1120 (9th Cir.), cert. denied, 128 S. Ct. 709 (2007).1
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`B. DISCUSSION OF ATTORNEY’S FEES
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`Interlam asserts that there is a strong presumption in favor of awarding fees to
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`prevailing defendants. Assessment Technologies of WI, LLC v. WIREdata, Inc., 361
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`1 Modular Arts briefly makes an argument that Interlam cannot request attorney’s fees because
`it failed to specify the request in a Pre-Trial Order. Opp’n, docket no. 86, at 1. The argument
`is without merit because the prevailing party had not been determined at that stage of the
`litigation.
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`ORDER
`PAGE - 2
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`Case 2:07-cv-00382-TSZ Document 123 Filed 01/20/09 Page 3 of 7
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`F.3d 434, 437 (7th Cir. 2004). However, there are several reasons to believe that such a
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`presumption does not apply, in the Ninth Circuit in general, or in this case in particular.
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`First, WIREdata is a Seventh Circuit case; Interlam has not cited Ninth Circuit authority
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`that indicates an applicable presumption. Second, in WIREdata, an award of attorney’s
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`fees was appropriate because the Plaintiff’s conduct came close to copyright misuse; in
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`that case, the Plaintiff was attempting to extend copyright protection to public domain
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`data. Id. at 437. No such accusation of an impermissible application of copyright has
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`been claimed against the Plaintiff in the present case. Third, in Fogerty, the Supreme
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`Court rejected an argument that courts in copyright cases should employ the “British
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`Rule” and automatically award attorney’s fees to prevailing parties. Fogerty v. Fantasy,
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`Inc., 510 U.S. 517, 534 (1994).2
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`The courts have identified the following non-exclusive factors when evaluating
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`the award of attorney’s fees. These factors include: (1) the degree of success obtained,
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`(2) motivation, (3) frivolousness, (4) objective unreasonableness, (5) the need to
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`advance considerations of compensation and deterrence, (6) the purposes of the
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`Copyright Act, and (7) whether the chilling effect of attorney’s fees may be too great or
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`impose an equitable burden on an impecunious plaintiff. See Wall Data Inc. v. L.A.
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`County Sheriff’s Dep’t, 447 F.3d 769, 787 (9th Cir. 2006); Ets-Hokin v. Skyy Spirits,
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`Inc., 323 F.3d 763, 766 (9th Cir. 2003); Fogerty v. Fantasy, Inc., 510 U.S. 517, 535
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`n.19 (1994).
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`2 Even if a presumption of attorney’s fees exists, the Court would not award attorney’s fees in this case
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`ORDER
`PAGE - 3
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`Case 2:07-cv-00382-TSZ Document 123 Filed 01/20/09 Page 4 of 7
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`As to the first factor, degree of success obtained by the prevailing party, the
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`Defendant prevailed at trial. A jury’s question “unambiguously demonstrated the jury’s
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`intent”:
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`CAN WE AWARD INTERLAM DAMAGES IN THE AMOUNT OF THE
`COSTS OF ATTY FEES, TRAVEL & EXPENSES?
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`Van Camp Decl., docket no. 77, Ex. D; Def.’s Motion, docket no. 76, at 2:7-15. The
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`first factor weighs in favor of Defendant.
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`As to the second factor, frivolousness, the Defendant points to a pre-litigation
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`e-mail in which Interlam explained that it employed a patented process for creation of
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`their wall panel; Interlam suggests that Modular Arts was reckless to continue with
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`litigation. Def.’s Motion 12:6-13:6. The relevance of Interlam’s patent is slight. A
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`patent claiming a method of manufacturing a design does not speak to the originality of
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`that design. The Plaintiff provided substantial evidence that, if believed by a jury,
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`would have proven copyright infringement. The second factor weighs in favor of the
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`Plaintiff.
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`As to the third factor, Plaintiff’s motivation was to enforce their copyright
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`registration to maintain a competitive business advantage. This is a proper motivation.
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`Defendant’s motivation in continuing to defend was based on its position that it did not
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`copy the Plaintiff’s work. However, e-mail evidence in the case demonstrates
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`Defendant’s motive to “[t]ry to get the new sample panel to be as close to the mock-up
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`as humanly possible,” referring to Plaintiff’s panel installed in a mock-up at a customer
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`ORDER
`PAGE - 4
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`Case 2:07-cv-00382-TSZ Document 123 Filed 01/20/09 Page 5 of 7
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`site. Boller Decl., docket no. 25, Exhibit F at 5. Thus, Defendant’s motivation was to
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`create a panel “as close . . . as humanly possible” to Plaintiff’s registered panel. Under
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`these circumstances the motivation factor favors Plaintiff.
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`As to the fourth factor, the reasonableness of the party’s legal and factual
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`arguments, the arguments submitted to the Court by Modular Arts were reasonable.
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`Modular Arts submitted evidence of substantial similarity and evidence of access to the
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`design via testimony about the Red Rock mock-up trailer and the alleged access to a
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`web site. Van Camp Aff., docket no. 30, Exhibit G, Eckenrod Depo. at 12:20-13:1,
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`14:5-14:16; Boller Reply Decl., docket no. 36, Exhibit C, Greene Depo. at 32:1-7
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`(access of Modular Arts web site by Greene). Modular Arts’ factual and legal
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`arguments were reasonable.
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`The fifth factor requires the Court to advance considerations of compensation
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`and deterrence. On the issue of compensation alone, Interlam could be compensated
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`for a case in which no infringement was found. Regarding deterrence, the Court must
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`determine whether Modular Arts is a Plaintiff that needs to be cautioned before filing
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`further copyright infringement lawsuits. In this instance, Modular Arts is a
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`manufacturing company that is protecting a copyright registration related to products
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`that it manufactures. There is no need for deterrence. This factor does not weigh in
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`favor of either party.
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`As to the sixth factor, the purposes of the Copyright Act, a key criteria is the
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`promotion of creativity for the public good. Jackson v. Axton, 25 F.3d 884, 890 (9th
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`ORDER
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`Case 2:07-cv-00382-TSZ Document 123 Filed 01/20/09 Page 6 of 7
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`Cir. 1994), overruled on other grounds by Fogerty, 510 U.S. at 531-32. Interlam argues
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`that an award of attorney’s fees furthers the purposes of copyright because Interlam
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`independently created its wall panel. Def.’s Motion at 3:4-15. The argument is not
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`persuasive. First, Interlam’s main evidence of independent creation, a patent on a
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`process to create panels was not necessarily evidence of independent creation. Second,
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`e-mail evidence suggested Defendant intentionally tried to make their product resemble
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`Plaintiff’s registered design “as close . . . as humanly possible.” The Defendant’s act of
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`copying images in an e-mail, albeit with a patented manufacturing technique, hardly
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`promotes the purposes of the copyright laws. Most importantly, the reasons behind the
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`jury’s verdict remain unknown. Perhaps the jury simply decided that the panels were
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`not substantially similar after all, and never reached the independent creation defense.
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`Modular Arts obtained a copyright registration for a design of a product they
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`manufacture. Amended Compl., docket no. 4, Ex. B. If a Plaintiff is afraid of asserting
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`a copyright registration because of the probability of paying a substantial judgment for
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`attorney’s fees and costs, it would chill any incentive to litigate valid copyright claims.
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`The sixth factor weighs in favor of the Plaintiff.
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`As to the seventh factor, the impecunious factor is not relevant.
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`Although the Defendant ultimately prevailed, the Plaintiff’s case was not
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`frivolous. The case was fairly tried and should not deter similar cases in the future.
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`Most importantly, awarding attorney’s fees in this case would be more likely to stifle
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`legitimate copyright claims than deter frivolous litigation. The Copyright Act grants
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`ORDER
`PAGE - 6
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`Case 2:07-cv-00382-TSZ Document 123 Filed 01/20/09 Page 7 of 7
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`the Court discretion to award attorney’s fees and full costs to Interlam. Under all the
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`circumstances, and for the reasons stated in this Order, the Court DECLINES to award
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`attorney’s fees and costs to Defendant.
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`IT IS SO ORDERED.
`DATED this 20th day of January, 2009.
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`s/ Thomas S. Zilly
`_________________________________
`THOMAS S. ZILLY
`United States District Judge
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`ORDER
`PAGE - 7
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