Wednesday, October 12, 2011

36th Annual Intellectual Property Institute in Dana Point

Ok, I usually don't shill for anybody, but this is a worthy event and, if you're wasting time reading my blog (and yes, George, I know you are), then you might as well know about a really good source of IP information. Namely, the 36th Annual Intellectual Property Institute.

This year the festivities will be held on November 10-12, in Dana Point. It does cost something -- but there are no cops at the door, so even if you're flat broke, super cheap, or both, you could still probably listen from hall -- or ask people what was said on their way out for any particular discussion. Will it be annoying if you do so? Yes. Will you be able to nab some free coffee at the same time? Yes? Does that make it worth it? Doesn't it?

In any event, I am inviting one and all to join me at the 36th Annual Intellectual Property Institute at the Marriott Laguna Cliffs Resort, in Dana Point, California, for excellent continuing legal education programs, networking, meals, fun. On top of all that, you can join in the celebration of the IP Section's IP Vanguard Award honorees: Jay Monahan @ Zynga, Adrian Pruetz @ Pruetz Law Group, Hon. Judge Kozinski @ 9th Circuit, and Eric Goldman @ Santa Clara University School of Law. (Side note: Eric is the person who first showed me the Internet -- so in a way, this entire blog is his fault.)

The Institute is a relative bargain according to the people who are trying to get you to by tickets, and there are steeply discounted resort rates (again, according to . . . .) See for more information.

And please pass this invitation on to your colleagues and friends. Thanks.

Monday, May 9, 2011

More, Yes More!, On Rule 68

For no good reason, I'm adding still more information for you on Federal Rule of Civil Procedure, Rule 68. Why? What, you've got something better to read? The New Yorker perhaps. Relax this will only take a minute. Besides, I mention it because it recently came up (again), and it's information worth sharing.

Rule 68 can be an excellent tool in copyright cases, especially where you believe your client may have engaged in an act that will lead to a finding of infringement.

In such a situation, where you believe a judgment is likely to be rendered against you anyway, making a Rule 68 Offer of Judgment is a terrific way to keep the otherside's costs and fees -- which you may be expected to pay under Section 505 of the Copyright Act -- from accruing.

Make the offer early, and you cap the fees/costs if you make a good bet on: (1) the ultimate damage award and (2) the otherside's costs and fees to date.

This is because Fed. R. Civ. P. 68 provides that “[i]f the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” In copyright actions, the term “costs” includes a prevailing party’s attorney fees. See, 17 U.S.C. § 505 (“the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.”). Thus, a Rule 68 offer will cut off a prevailing plaintiff’s post-offer attorney fees if the judgment he or she receives is less than the defendant’s Rule 68 offer. See, Merek v. Chesney, 473 U.S. 1, 8-10 (1985) (holding that when underlying statute defines “costs” to include attorney’s fees, such fees are to be included as costs for purposes of cost shifting. The court thus concluded that plaintiffs “who reject an offer more favorable than what is thereafter recovered at trial will not recover attorney's fees for services performed after the offer is rejected.”); see also William F. Patry, Patry on Copyright § 22:217 (“Rule 68 [can] be used as a sword against plaintiff to deny plaintiff his attorney's fees postoffer.”).

So in a nutshell, it works like this: You think it's likely you'll get tagged with infringement, but you think damages are worth no more than -- let's keep it simple and say $10,000. You think the fees and costs to date are minimal. Let's say $10,000. You therefore make your Rule 68 Offer for a skosh over $20K, call it $23. If plaintiff is foolish enough to reject that offer, and fails to do better than this figure at trial (measuring damages plus costs and fees as of the date the Rule 68 Offer was made), plaintiff's recovery of fees and costs is capped as of that date.

It's a neat tactic if it works. But then again, what isn't?

Jonathan Pink is Chair of the Internet and New Media Team at Bryan Cave, LLP. He is an intellectual property and commercial litigator resident in the firm's Orange County and Los Angeles offices.

Monday, April 25, 2011

Turns out I was Wrong . . . . Rule 68 and Attorneys Fees

After all this time . . . I had thought that FRCP Rule 68 was an excellent tool to hammer the plaintiff, even where the copyright defendant had in fact copied. This is because an argument exists that the recoverable "costs" under Rule 68 include attorneys fees. Thus, by making a Rule 68 offer early in the game, the defendant could shift the fees burden even if infringement was found (assuming, of course, the offer exceeded what plaintiff was able to recover at trial).

Opps. Turns out I was wrong, at least in part. Turns out there is a split in authority. I've been taking one side, while the 9th Circuit has taken the other.

In Ninth Circuit copyright actions, costs awardable pursuant to a Fed. R. Civ. P. 68 offer of judgment that exceeds plaintiff’s recovery at trial do not include a defendant’s post-offer attorney’s fees. This is because the Ninth Circuit has held that Rule 68 “costs” do not include a non-prevailing defendant’s post offer attorney’s fees when the underlying statute only awards attorney’s fees to a prevailing party. See, Champion Produce, Inc. v. Ruby Robinson Co., Inc., 342 F.3d 1016, 1031-32 (9th Cir. 2003). 17 U.S.C. § 505, the copyright provision dealing with attorney’s fees awards, provides that attorney’s fees may be awarded as a component of costs, but only to a prevailing party. 17 U.S.C. § 505 (“[T]he court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.”).

Thus, because a defendant who is entitled to post Rule 68 offer costs is necessarily not the prevailing party (as the defendant is consenting to judgment), copyright defendants in this Circuit may not recover attorney’s fees as a component of costs. This view is also held by the First, Third, Fifth, Seventh, Eighth, Ninth, and D.C. Circuits. See, William F. Patry, Patry on Copyright § 22:215 (2011).