9th Circuit Says Copyright Attorney Fees Available in Declaratory Suits

A declaratory judgment action for copyright abandonment can give rise to fee shifting under the Copyright Act, the U.S. Court of Appeals for the Ninth Circuit ruled in a case of first impression. Doc's Dream LLC v. Dolores Press Inc., 18-56073. The appeal court's decision means that a Georgia minister's company that rebroadcasts the sermons of TV preacher Eugene Scott could be on the hook for up to $307,000 in attorney fees.

"We hold that, even when asserted as a claim for declaratory relief, any action that turns on the existence of a valid copyright and whether that copyright has been infringed invokes the Copyright Act, and thus attorney's fees may be available pursuant to §505," Circuit Judge Consuelo M. Callahan wrote for a unanimous Ninth Circuit panel.

The case is part of a "litany of claims, counterclaims, and motions" over the rights to Scott's televised sermons, which started in the Los Angeles area in the 1970s and eventually were broadcast throughout North America as part of a 24-hour-a-day religious network.

Scott licensed Dolores Press Inc. to distribute his works in 1995, with profits going to his Wescott Christian Center and Faith Center. During that time he made his works available for online viewing and, according to plaintiffs in the case, "encouraged his followers and the public at large to freely download, reproduce, and distribute an archive of his works."

On his death in 2005, Scott bequeathed his copyrights to his widow, Melissa Scott, who continued the licensing arrangement with Dolores Press. Georgia minister Patrick Robinson asked Melissa Scott for permission to share the works with his students online. Though Scott refused, Robinson moved ahead anyway with a website to share the works. According to the Ninth Circuit, Robinson said his goals were "to stick it to the devil" and "get the ball rolling in this legal matter."

"Robinson succeeded in the latter," Circuit Judge Callahan wrote. Dolores Press sued for copyright infringement and Robinson's company, Doc's Dream, sued for a declaration that Scott had abandoned his copyrights before his death. U.S. District Judge Manuel Real of the Central District of California granted summary judgment for Dolores Press that there had been no abandonment. Dolores and Melissa Scott then moved for $307,000 in fees.

District Judge Real denied the motion. With no case law on the subject, Real looked to the Nimmer on Copyright treatise and concluded that because Robinson's suit for a declaration of copyright abandonment didn't require construction of the Copyright Act, a fee award was outside its scope.

Circuit Judge Callahan, joined by Ninth Circuit Judges John B. Owens and U.S. Eastern District of New York Judge Edward R. Korman, siting by designation, ruled that even under the logic of the Nimmer treatise, fees would be available. Nimmer states that the Copyright Act would have to be construed in "a case in which E sues F for a declaration that the work in question falls outside the scope of copyright protection."

That hypothetical is "nearly identical to this case," Judge Callahan wrote. "We read §505, as does Nimmer, to allow the discretionary award of attorney's fees in any action where the scope of the copyright is at issue." And it would be "difficult — if not impossible — to properly evaluate an intellectual property creator's alleged abandonment without invoking the Copyright Act."

Judge Callahan explained: "The district court's grant of summary judgment shows that Doc's Dream's complaint raised at least three aspects of the Copyright Act. First, the district court reasoned that Dr. Scotts "attribution requirement is incompatible with copyright abandonment." Copyright attribution is governed by 17 U.S.C. §106A. Second, the district court stated that Dr. Scott's free distribution of his works online 'is more consistent with a license for use' than a relinquishment of his exclusive rights. The transfer of copyright ownership, including licensing, is defined within §§101 and 204. Third, the district court explained that because Dr. Scott affixed copyright notices to his works, he did not intend to abandon them. The legal effect of copyright notices is controlled by §401."

U.S. Central District Judge Percy Anderson has now taken over the copyright litigation from Real, who died last June. The Ninth Circuit instructed District Judge Anderson to consider whether an award of fees to Dolores Press and Scott would be appropriate under the actors for doing so in Fogerty v. Fantasy Inc., 510 U.S. 517 (1994).

In a separate order, the Ninth Circuit awarded fees on appeal to Dolores Press and to Scott. The court referred the case to Appellate Commissioner Peter Shaw to determine an amount, reviewable by the court.

The appellate win goes to Manatt Phelps & Phillips partner Benjamin Shatz; Kevin Leichter and Andrew Hewitt of The Leichter Firm; and Mark Lee of Rimon, all of whom represented Dolores Press and Melissa Scott.

Doc's Dream was represented by the Digital Business Law Group of Palm Harbor, FL.

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Scott Graham focuses on intellectual property and the U.S. Court of Appeals for the Federal Circuit. He writes ALM's Skilled in the Art IP briefing. Email: [email protected].