Case: 3:19-cv-00586-wmc Document #: 181 Filed: 07/19/22 Page 1 of 13
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF WISCONSIN
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`ERIC and TRACY EHMANN,
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`Plaintiffs,
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`v.
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`NICHOLAS and TRISH METROPULOS,
`dba Home of The Hodag Wear,
`dba Metro Screenprinting and Embroidery,
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`Defendant.
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`OPINION & ORDER
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`19-cv-586-wmc
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`Plaintiffs Eric and Tracy Ehmann claimed copyright ownership in a number of original
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`artistic designs of the “Hodag,” the mascot of Rhinelander, used by defendants Nicholas and
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`Trish Metropulos to print and sell merchandise online and in their store. Specifically, plaintiffs
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`alleged that in 2006, Tracy Ehmann created and registered a copyright in the Hodag logos
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`before later transferring all of her ownership and copyright interests in those logos to her
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`husband, Eric Ehmann. Plaintiffs further alleged that they discovered in 2019 that defendants
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`were using the same Hodag logos without license or permission to do so. Defendants disputed
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`Eric Ehmann’s ownership interest and alleged that in or around 2007, Tracy Ehmann had
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`verbally granted them permission to use her logos in return for satisfaction of her unpaid debt
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`with their store.
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`Following a two-day trial, the jury returned a unanimous verdict in favor of defendants,
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`finding that they proved by preponderance of the evidence that Tracy Ehmann granted them
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`an implied license to use the Hodag logos on merchandise sold at retail. (Jury Verd. (dkt.
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`#168).) The court entered judgment in favor of defendants the following day, March 17,
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`2021. (Judg., (dkt. #169).). Defendants now ask the court to award them $46,988.95 in
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`Case: 3:19-cv-00586-wmc Document #: 181 Filed: 07/19/22 Page 2 of 13
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`attorneys’ fees and $7,165.30 in costs as the prevailing party in a copyright infringement
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`lawsuit under 17 U.S.C.A. 505. (Dkt. #171 and #174.)
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`For the reasons that follow, the court will grant defendants’ motion for attorney’s fees
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`in the amount of $24,175.25, as well as grant in part and deny in part defendants’ bill of costs
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`in the amount of $2,166.30 in costs, for a total award of $26,341.55.
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`OPINION
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`I.
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`Attorney Fees
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`A. Award of Fees
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`Under the Copyright Act, a district court “may allow the recovery of full costs. . . and
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`may also award a reasonable attorney’s fee to the prevailing party as part of the costs.” 17
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`U.S.C. § 505. The Act’s language “clearly connotes discretion, and eschews any ‘precise rule
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`or formula’ for awarding fees.” Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197, 202 (2016)
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`(quoting Fogerty v. Fantasy, Inc., 510 U.S. 517, 533, 534 (1994)). However, a district court’s
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`discretion is limited by two principles. Moffat v. Acad. of Geriatric Physical Therapy, No. 15-CV-
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`626-JDP, 2017 WL 4217174, at *1 (W.D. Wis. Sept. 20, 2017). First, “a district court may
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`not ‘award[ ] attorney's fees as a matter of course’; rather, a court must make a more
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`particularized, case-by-case assessment.” Kirtsaeng, 579 U.S. at 202 (quoting Fogerty, 510 U.S.
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`at 533). Second, the court “may not treat prevailing plaintiffs and prevailing defendants any
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`differently.” Id. Defendants should be “encouraged to litigate [meritorious defenses] to the
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`same extent that plaintiffs are encouraged to litigate meritorious claims of infringement.” Id.
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`(quoting Fogerty, 510 U.S. at 527). Thus, the Copyright Act “treats both sides equally and
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`allows an award in either direction.” Riviera Distributors, Inc. v. Jones, 517 F.3d 926, 928 (7th
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`Cir. 2008).
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`Within these two limiting principles, a district court may consider several discretionary
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`factors: (1) frivolousness of claims or defenses; (2) motivation of the parties; (3) objective
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`unreasonableness (both in the factual and in the legal components of the case); and (4) the
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`need in particular circumstances to advance considerations of compensation and deterrence.
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`Kirtsaeng, 579 U.S. at 202 (quoting Fogerty, 510 U.S. at 534, n.19); Timothy B. O’Brien LLC v.
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`Knott, 962 F. 3d 348, 350 (7th Cir. 2020). This is not an exclusive list of factors because the
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`district court has wide discretion to consider the totality of circumstances. Id.
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`In the Seventh Circuit, “the two most important considerations . . . ‘are the strength
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`of the prevailing party’s case and the amount of damages or other relief the party obtained.’”
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`Klinger v. Conan Doyle Estate, Ltd., 761 F.3d 789, 791 (7th Cir. 2014) (quoting Assessment Techs.
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`of Wis., LLC v. WIREdata, Inc., 361 F.3d 434, 436 (7th Cir. 2004)); see also Moffat, 2017 WL
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`4217174, at *2 (quoting same). This means that “[i]f the case was a toss-up and the prevailing
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`party obtained generous damages, or injunctive relief of substantial monetary value, there is no
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`urgent need to add an award of attorneys’ fees.” Klinger, 761 F.3d at 791 (quoting Assessment
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`Techs., 361 F.3d at 436). On the other hand, if “the claim or defense was frivolous and the
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`prevailing party obtained no relief at all, the case for awarding attorneys’ fees is compelling.”
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`Id.
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`In particular, the Seventh Circuit affords “defendants who prevail against copyright
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`claims a ‘strong presumption’ that they are entitled to attorneys’ fees.” Timothy B. O’Brien,
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`962 F. 3d at 350 (quoting Assessment Techs., 361 F.3d at 437); see also Klinger, 761 F.3d at 791
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`(same). This rule avoids forcing a defendant to enter into “a nuisance settlement” and abandon
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`meritorious defenses. Klinger, 761 F.3d at 791 (quoting Assessment Techs., 361 F.3d at 437);
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`Moffat, 2017 WL 4217174, at *2. With this analytical framework in mind, the court turns to
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`the relevant discretionary factors. However, because that presumption is not dispositive, the
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`remaining factors require analysis. See O'Brien, 962 F.3d at 351 (“[O]ur caselaw has never held
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`that the strong presumption was insurmountable; rather, we have consistently required a fact-
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`specific, case-by-case inquiry.”).
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`1. Strength of the Parties’ Respective Positions
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`Defendants were obviously the prevailing party at trial because the copyright claim at
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`the heart of this case was decided in their favor, and having made no affirmative recovery,
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`defendants are entitled to a presumption favoring an award of their fees under the Seventh
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`Circuit’s guidance. The strength of plaintiffs’ case is also a factor that weighs slightly in favor
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`of awarding fees to defendants. At trial, the parties agreed that: (1) the Hodag logos are the
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`subject of a valid copyright covering the images used by defendants; (2) one of the plaintiffs
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`owns the copyright; and (3) defendants copied protected expression in or prepared derivative
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`works based on the copyrighted work.
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`Accordingly, the only issue at trial was whether defendants were authorized to use the
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`copyrighted work. Plaintiffs’ position was that Tracy Ehmann provided defendants with a
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`limited license agreement on May 1, 2009, for the use of a 2-D rendering of her copyrighted,
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`3-D Hodag statue for satisfaction of an undisputed debt, but that defendants then overreached
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`that agreement and used other, unauthorized copyrighted designs. Defendants denied ever
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`executing a licensing agreement for the 2-D rendering, which they already had access to through
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`the Rhinelander Area Chamber of Commerce, and alleged instead that Tracy Ehmann had
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`granted them an implied, verbal license to use the copyrighted Hodag logos to satisfy her
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`unpaid debt. Considering this one question -- whether plaintiff Tracy Ehmann granted
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`defendants a limited license to use a 2-D rendering or an implied, unlimited license in the
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`copyrighted work generally -- the jury answered in defendants’ favor.
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`Although plaintiffs’ claims were certainly facially plausible, their case was substantively
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`weak because they had little evidence to support their assertion that defendants exceeded a
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`valid, limited 2009 license, including no signed copies of key documents or witnesses to
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`corroborate Tracy’s account, however credible she was on the stand. Plus, plaintiffs Tracy
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`and Eric Ehmann both testified that the signed, limited license agreement and all of the
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`documents related to Tracy’s supposed conveyance of her copyright interests to Eric were
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`destroyed in a flood in 2010.
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`Although plaintiffs were able to present a copy of a computer file with an unsigned
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`version of the licensing agreement that the parties allegedly executed, their own expert
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`testified that the agreement had been edited in July 2009, after the document allegedly
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`went into effect in May 2009. Defendants also presented persuasive evidence that the 2-
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`D rendering was useless to them because they could not screenprint it on shirts and other
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`merchandise, and they already had access to nearly identical trademarked logos as a
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`member of the Rhinelander chamber of commerce, who commissioned Tracy to produce
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`that rendering for its members use. Finally, defendants correctly pointed out that the two
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`cease and desist letters sent by Eric Ehmann to defendants approximately 10 years later
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`did not mention the alleged licensing agreement. Combined with Eric’s somewhat
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`confusing testimony, which was less credible than Tracy’s, the jury obviously accepted
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`defendants’ version of events.
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`Still, the evidence that defendants presented in support of their claim that Tracy
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`Ehmann gave them a sweeping verbal permission to use her logos to satisfy an outstanding
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`debt was also largely limited to their own testimony. Specifically, defendants testified that:
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`(1) Tracy approached them in the second week of February 2008, stating that she was
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`leaving town because she was upset over the end of her marriage and the closing of her
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`Hodag gallery; and (2) defendants could have her Hodag Logos for their own use in
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`exchange for satisfaction of her $300-$400 outstanding debt to defendants’ store. Plaintiffs
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`unsuccessfully countered that Tracy Ehmann had no reason to be distressed in February 2008
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`because she had divorced her then husband the prior year and entered a new relationship with
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`Eric Ehmann in August 2007. Although the jury did not believe plaintiffs’ version of events,
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`defendants bear some responsibility for this lawsuit, having failed to document Tracy’s
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`supposed unqualified grant of a license in any writing, much less one that clearly specified
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`ownership and subsequent use of the copyrighted Hodag logos.
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`Even considering defendants’ own, inconsistent evidence and failure to document the
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`supposed sweeping license, the court finds that this factor tips slightly in favor of defendants
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`because the jury ultimately credited defendants’ testimony and additional evidence regarding
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`the 2-D rendering over plaintiffs’ testimony.
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`2. Other Factors
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`Defendants also contend that this lawsuit was motivated by plaintiffs’ desire to achieve
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`financial gain from a copyright that they knew Tracy had forfeited. In support, defendants
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`rehash the same evidence as above and discuss evidence not admitted at trial regarding Eric
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`Ehmann having made similar, unfounded copyright claims against Rhinelander Brewing
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`Company, Shirt Signs & Designs, and the Rhinelander Area Chamber of Commerce. Although
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`plaintiffs have chosen not to respond further to defendants’ accusation, there is little actual
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`evidence suggesting that plaintiffs’ motivation regarding the enforcement of their copyright
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`interests was improper, and the court declines to place any weight on this factor.
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`However, defendants point to two ways in which plaintiffs inflated legal costs. First,
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`they argue that defendants were forced to hire an expert to challenge the legitimacy of the
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`unsigned licensing agreement that addressed a wholly different copyrighted design than the
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`logos at issue. Second, Eric Ehmann impeded and put a premature end to the January 13,
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`2020, deposition of Tracy Ehmann with numerous arguments and baseless objections.
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`While defendants’ expenditure on its own rebuttal expert was largely unnecessary given
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`plaintiffs’ expert agreed the timing of the license agreement did not hold up, defendants
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`correctly point out that Eric Ehmann’s improper conduct during the prosecution of plaintiffs’
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`case significantly delayed the discovery process and required court intervention. Indeed, after
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`reviewing the deposition transcript, Judge Crabb granted defendants’ request to retake Tracy
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`Ehmann’s deposition outside the presence of Eric Ehmann, who was instructed not to
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`communicate with Tracy Ehmann during the deposition, including during questioning or
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`breaks. (Ord. (dkt. #55) 3). Moreover, Ehmann chose not to respond to defendants’
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`arguments regarding his conduct, which the court agrees was improper, wasteful, and
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`unnecessarily costly for defendants. Therefore, at least plaintiff Eric Ehmann’s overall litigation
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`conduct weighs in favor of awarding attorney fees. See Riviera Distributors, 517 F.3d at 929
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`(“The party responsible for creating excessive legal costs must bear them itself in the end.”).
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`Even this is tempered in part by Eric’s pro se status and obvious lack of objectivity.
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`On balance, then, the discretionary factors favor granting defendants’ motion for
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`attorney fees, and certainly do not overcome the presumption in favor of such an award. The
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`court turns now to the question of the amount of fees.
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`B. Amount of Attorney Fees
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`The basic approach to evaluating reasonable fees is the lodestar approach, in which the
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`court considers whether the attorney’s hourly rate and the hours spent are reasonable.
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`Defendants seek an award of $46,988.95, representing $45,626.50 in attorneys’ fees and
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`$1,362 for out-of-town travel, copy, and process services.1 In support of their motion for fees,
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`defense counsel have submitted time records showing that Attorney Jeremy Gill and his
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`associates, Patrick McDonald and Beau Krueger, spent a total of 339.10 hours on defendants’
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`case, for which they seek $145 per hour for Gill’s time and $130 per hour for McDonald’s and
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`Krueger’s time. (Fee pet. (dkt. #173-1).) Plaintiffs do not object to the hourly rates, the
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`number of hours charged, or the additional copying and process server fees. Instead, they point
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`out that all of defendants’ attorney fees and costs have been covered by their general liability
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`insurance policy.
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`The court finds the number of hours expended to be reasonable considering that this
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`case proceeded to a jury trial, and the attorneys’ hourly rates are more than reasonable given
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`the market rate for similarly skilled attorneys in the community. The court does not find it
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`consequential that an insurance company may or may not have paid for the cost of the defense
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`in this case. Plaintiffs have provided no authority to suggest that the presumption of awarding
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`fees to defendants who prevail against copyright claims without any recovery is somehow
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`weakened because an insurance company paid the defense costs or stands in defendants’ shoes
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`seeking a subrogated recovery.
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`1 While the travel, copy and process services are costs, defendants have included them along with
`their request for fees even though they filed a separate bill of costs, presumably because most of
`these particular costs relate to the attorneys’ travel. Because the Copyright Act permits the
`prevailing party to recover their full costs, 17 U.S.C. § 505, and the parties agree that they are
`reasonable and appropriate, they will be included as part of the award under § 505.
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`Although this court has suggested that the relative wealth of the parties may be taken
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`into consideration under the right circumstances, plaintiffs have not introduced evidence of
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`their own personal resources. See Moffat, 2017 WL 4217174, at *4 (“[T]he court will not
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`simply assume that [plaintiffs] cannot afford to pay [defendant’s] fees because they are
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`individuals rather than business entities.”). However, the court does feel compelled to reduce
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`the size of the fee award in light of plaintiffs’ pro se status, strength of the copyright itself, and
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`apparent sincerity of Tracy Ehmann, who likely would have resolved this matter sooner but for
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`Eric’s ill-advised, “bull in a china shop” approach.
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`Finally, the court will make an adjustment to reflect defendants’ share of responsibility
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`for the failure to settle the licensing issue up front with a clear written contract. See Moffat,
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`2017 WL 4217174, at *7 (finding similar and reducing fees accordingly) (citing Kirtsaeng, 579
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`U.S. at 202, as support for considering “the need in particular circumstances to advance
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`considerations of compensation and deterrence”)). Both sides bear responsibility for this
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`particular failure, although plaintiff Eric Ehmann’s conduct of this case also warrants
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`deterrence. Id. Therefore, to provide an appropriate incentive for parties to resolve copyright
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`ownership issues in advance, and to provide an appropriate deterrent for failing to do so, the
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`court concludes that it is appropriate to reduce defendants’ fee award in this case by one-half.
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`Accordingly, the court will award defendants’ attorney fees in the amount of $22,813.25 and
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`$1,362 for out-of-town travel, copy, and process services, for a total of $24,175.25.
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`II.
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`Costs
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`This leaves the question of an award of costs. Defendants have submitted a bill of costs
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`and seek to recover $7,165.30, which includes $1,557.55 for obtaining deposition transcripts,
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`$608.75 in witness fees, and $4,999 for copying the digital computer files of the alleged license
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`agreement and analyzing the metadata contained in it. (Dkt. #174.) Plaintiffs object to all
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`of these costs, arguing that they were unnecessary and unreasonably high. (Dkt. #177 at 2.)
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`For the reasons below, the court sustains plaintiffs’ objections only with respect to the digital
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`copying, resulting in an award of $2,166.30 for the costs of deposition transcripts and witness
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`fees.
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`A. Deposition transcripts
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`Plaintiffs argue that defendants unnecessarily ordered the deposition transcripts of
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`Nicholas Metropulos and Tracy Ehmann, when in fact plaintiffs provided defendants with a
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`courtesy copy of Metropulos’s deposition transcript on the day they received it and defendants
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`have failed to explain why they needed the transcripts. The court is satisfied that defendants
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`acted reasonably in obtaining transcripts of Ehmann’s and Metropulos’s depositions for use in
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`responding to plaintiffs’ motion for summary judgment, preparing Metropulos for his
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`testimony at trial, and cross examining Tracy Ehmann at trial. See 28 U.S.C. § 1920(2) (cost
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`of printed or electronically recorded transcript is recoverable if it is “necessarily obtained for
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`use in the case”); Nat’l Org. for Women, Inc. v. Scheidler, 750 F.3d 696, 698-99 (7th Cir. 2014)
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`(“[N]ecessarily” means “no more than that the transcripts or copies be reasonably and
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`prudently obtained—which depends on how things seemed when the expenditures were made,
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`without benefit of hindsight.”).
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`B. Witness fees
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`Similarly, defendants seek to recoup $608.75 in witness fees (a $40 daily attendance
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`fee and mileage costs) paid in advance to the following witnesses: Lauren Sacket, director of
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`the Rhinelander Chamber of Commerce; David Meinnert, owner of Shirts, Signs & Designs;
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`and Sean Quellos, forensic lab manager and senior examiner at Digital Forensics Corporation.
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`Sackett was expected to testify to defendants’ permitted use of the Chamber’s Hodag logo, and
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`Meinnert was expected to testify about his use of the chamber’s logo and accusations of
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`copyright infringement that Eric Ehmann previously made against him. Quellos was
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`defendants’ expert witness who prepared a report on his examination of the file of the
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`purported licensing agreement provided by plaintiffs.
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`Plaintiffs object to defendants’ request for witness fees on the ground that none of these
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`witnesses appeared at trial. However, defendants explain that Quellos’s testimony would have
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`been cumulative given concessions made at trial by plaintiffs’ expert witness, and Sacket’s and
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`Meinhert’s testimony would ultimately have had limited relevance in light of certain
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`evidentiary rulings made by the court.
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`Witness fees are expressly authorized by 28 U.S.C. § 1920(3). Because the court finds
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`that the testimony of Quellos, Sacket, and Meinhert was reasonably necessary to defendants’
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`case at the time the witnesses were subpoenaed, it does not matter that defendants never called
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`the witnesses at trial. See Dishman v. Cleary, 279 F.R.D. 460, 466 (N.D. Ill. 2012) (“Where
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`service on a witness is reasonable at the time, witness fees advanced will be awarded.”). The
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`court also finds that the amounts advanced by defendants to secure their testimony at trial was
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`reasonable in light of the statutory minimum and small allowances for travel. See id.; 28 U.S.C.
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`§ 1821(b) (“A witness shall be paid an attendance fee of $40 per day for each day's
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`attendance.”); 28 U.S.C. § 1821(2) (citing 5 U.S.C. § 5704 for allowable mileage costs).
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`C. Computer file
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`Finally, defendants submitted an invoice from Digital Forensics Corp. for a “Phase 1
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`examination – set fee cost” $4,999 (dkt. #175-3), which they say includes copying the
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`computer file and its metadata and “analyzing the same” (dkt. #178 at 9). Plaintiffs object to
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`the cost as unreasonably high, especially as compared to the $650 that plaintiffs paid their
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`expert to analyze plaintiffs' hard drive and two relevant digital files, produce a full report, and
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`testify at trial.
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`A court may tax as costs any fees related to the copying of any materials “necessarily
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`obtained for use in the case.” 28 U.S.C. § 1920(4). Specifically, defendants point this court
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`to its earlier decision in Split Pivot, Inc. v. Trek Bicycle Corp., 154 F. Supp. 3d 769, 777-80 (W.D.
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`Wis. 2015) (citing Race Tires America, Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158 (3d Cir.
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`2012); Colosi v. Jones Lang LaSalle Americas, Inc., 781 F.3d 293 (6th Cir. 2015); CBT Flint
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`Partners, LLC v. Return Path, Inc., 737 F.3d 1320 (Fed. Cir. 2013)). In Split Pivot, this court
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`held that § 1920(4) authorizes shifting of costs for the electronic assignment of Bates stamping,
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`shipping and delivery of electronic documents, native file and email conversion, TIFF image
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`creation and conversion (the agreed-upon default format for production of ESI), as well as the
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`imaging of metadata and hard drives.
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`While the court agrees that the cost of copying the digital files and metadata in this
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`case are recoverable under § 1920(4), defendants have not shown what part of the “Phase I
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`examination” performed by defendants’ expert, if any, was for copying or imaging as opposed
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`to other services. See id. at 780 (adopting limited definition of copying applied in Race Tires,
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`with caveat that costs of imaging metadata and hard drives are included for reasons stated well
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`in Colosi and CBT Flint); Wisconsin Alumni Rsch. Found. v. Apple, Inc., 261 F. Supp. 3d 900, 926
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`(W.D. Wis. 2017), aff'd in part, rev'd in part, 905 F.3d 1341 (Fed. Cir. 2018) (relying on Split
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`Pivot in awarding costs only for copying of electronic data, including metadata and hard drives,
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`and not data storage). By defendants’ own admission, the $4,999 fee seems to include time
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`spent analyzing the metadata, which is not recoverable as a cost for copying under the approach
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`adopted by this court and other circuits. See Sterling Nat'l Bank v. Block, 984 F.3d 1210, 1227
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`(7th Cir. 2021) (citing Race Tires, 674 F.3d at 167; Hecker v. Deere & Co., 556 F.3d 575, 591
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`(7th Cir. 2009)) (noting in dicta that collecting, preserving, processing, indexing, and keyword
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`searching ESI have been excluded from taxable costs).
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`Moreover, in an order entered on October 9, 2020, Judge Crabb directed plaintiffs to
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`produce to defendants the forensic copies of their licensing document files, along with the
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`necessary metadata, made by their expert. (Dkt. #85 at 4-5.) Given that defendants already
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`had a copy of the relevant computer files and metadata, it would appear that further imaging
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`was not required and that the fees charged by defendants’ expert were for time spent analyzing
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`the data. Accordingly, the court sustains plaintiffs’ objection as to these costs.
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`ORDER
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`IT IS ORDERED that defendants’ motion for attorney’s fees (dkt. #171) is GRANTED
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`and defendants’ bill of costs (dkt. #174) is GRANTED IN PART AND DENIED IN PART
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`consistent with this opinion. Defendants are awarded attorney’s fees and travel costs in the
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`amount of $24,175.25, as well as grant in part and deny in part defendants’ bill of costs in the
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`amount of $2,166.30 in costs, for a total award of $26,341.55.
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`Entered this 19th day of July, 2022.
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`BY THE COURT:
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`/s/
`_________________________________
`WILLIAM M. CONLEY
`District Judge
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` 13
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