9th Circuit reverses denial of attorney fees in infringement case

A 9th U.S. Circuit Court of Appeals panel reversed a district court's order denying plaintiff's motion for attorney fees in a settled Oregon copyright infringement suit Tuesday.

Glacier Films sued Andrey Turchin, a user of BitTorrent, a peer-to-peer network, saying he illegally downloaded and repeatedly distributed the film "American Heist." Per the parties' agreement in a stipulated consent judgment, the defendant stipulated to liability and to statutory damages of $750, and the district court entered a permanent injunction against him.

However, the defendant was not required to pay attorney fees to the prevailing party.

The 9th Circuit panel held that U.S. Magistrate Judge Stacie F. Beckerman in Portland abused her discretion by focusing on a generally unfavorable view of other BitTorrent litigation and failing to faithfully apply the "Fogerty factors" in deciding whether to award attorney fees. Glacier Films (USA) INC et al. v. Turchin, 2018 DJDAR 7205 (9th Cir. July 24, 2018).

The "Fogerty Factors" are the standards to be met in determining whether a losing party should be required to pay attorney fees in addition to fines.

9th Circuit Judge M. Margaret McKeown wrote in the opinion, "These suits are not without controversy: many involve 'copyright trolls' who buy up copyrights to adult films and then sue masses of unknown BitTorrent users for illegally downloading pornography. This one is different: a film production company sued a single user who illegally downloaded and distributed repeatedly 'American Heist,' a Hollywood action movie."

Judge Richard Paez and U.S. District Judge Cynthia Bashant of the Southern District, sitting by designation, concurred.

David Madden, co-counsel who represented Turchin, said these types of cases are solely about the attorney fees. He said he wasn't surprised the district court decision was appealed.

"Whenever a case does not deliver checks to a copyright troll attorney, it gets appealed," Madden said. "Any adverse judgment is a threat to this business model, so they have to appeal."

Madden, who called the practice "lucrative litigation," said he is involved in multiple copyright infringement cases currently being appealed.

However, Lincoln Bandlow of Fox Rothschild, who handles copyright infringement cases but was not involved in Glacier v. Turchin, disagreed with that assessment.

"They're not in it for the attorney fees," Bandlow said. "Think about the position of the plaintiff. They've had their work stolen, they've been forced to bring litigation because there's no reasonable alternative to address this, and yet they should lose their money trying to enforce this?"

Bandlow said he agreed with the court's decision to reverse the judgment.

"It's unfair to label anybody who pursues copyright infringement actions on behalf of their clients, or clients themselves, as copyright trolls," Bandlow said.

The opinion upheld the concept that one can't punish a particular case for the sins of past law firms who may have abused the process, he said.

Madden's interpretation of the ruling was quite different.

"The opinion is that, no matter how badly a copyright troll attorney behaves in every one of its other cases, you can't consider that in any particular case," Madden said.

Madden went on to describe a multifaceted scheme involving multiple parties working together to bring suits against unsuspecting torrent users.

"My guess is that there is an administrative company that runs all of this nationwide. There is definitely an investigation company in Germany which produces the data that these people sue about." Madden said.

"There is the movie company, which may or may not own the movie, and then there is the local attorney in each state who files dozens or hundreds of cases. Those are the four players on the plaintiff side. My guess is that they have an agreement where they split all the money," he added.

Bandlow called this theory "baloney" and "hocus pocus."

"The reality is, the mainline motion picture, the adult film industry, the record industry, Microsoft software industry are getting absolutely murdered by BitTorrent copyright infringement," he said.

Attorneys for the movie company said they were unable to immediately comment without checking with their client.