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West Publishing Co.’s assertion of a blanket copyright on published federal court decisions may have been wrong — but it does not justify awarding a competitor attorneys fees, the 2nd U.S. Circuit Court of Appeals has ruled. The 2nd Circuit found that a lower court erred in awarding $813,724 in fees based on a provision of the Copyright Act that prevents a publisher from claiming the rights to what is essentially the work of government agencies. The court in HyperLaw Inc. v. West Publishing Company, 00-7029, vacated the award of fees by U.S. District Judge John S. Martin Jr., of the U.S. District Court for the Sourthern District of New York, to CD-ROM publisher HyperLaw. The 2nd Circuit found that there can be no “violation” of Section 403 of the Copyright Act because that section merely allows for the mitigation of damages in a copyright action based on government works. But the three-judge panel, saying it was “unclear” whether Martin may have considered other factors in making the award, remanded the case. The legal fee dispute is all that remains of the lawsuit filed by Matthew Bender & Co. Inc. in 1994. HyperLaw later intervened in the action and, after Matthew Bender settled with West, HyperLaw remained to seek a declaratory judgment on what portions of reported opinions remained in the public domain. Specifically, HyperLaw asked the court to rule that the insertion in HyperLaw’s CD-ROMs of a “star pagination system,” one that cross-references to the page location of a particular text in West’s version of its opinions, did not infringe on West’s copyrights. Martin granted summary judgment to HyperLaw in 1996 on the star pagination feature. He said that West “was not endeavoring to protect an original work of authorship which would clearly foster the purposes of the Copyright Act,” but “was asserting a copyright in work consisting predominantly of the work of government agencies, i.e., the courts.” The 2nd Circuit upheld that ruling in a 2-1 vote. Addressing HyperLaw’s motion for an award of fees, Judge Martin said he would have been “sympathetic” toward West if the company had “forthrightly recognized” that the issue of asserting a copyright on court opinions was an “open question,” and the company made an effort to cooperate with HyperLaw to resolve the matter before a suit was filed. However, Martin said, “West used every effort to avoid an adjudication of its rights and to make it difficult for HyperLaw to determine what portions of the reported opinions were in the public domain and could be freely copied.” For example, Martin said, requests from HyperLaw for guidance from West on the extent of its copyright in the opinions were met with a general claim of ownership and a suggestion that HyperLaw seek the advice of its own counsel. The issue for Martin was that Section 403 bars the assertion of a copyright in a matter that consists predominantly of federal government works unless the copyright notice identifies that portion that is not subjected to copyright. LATEST RULING But on the appeal of the award of attorney’s fees, 2nd Circuit Judge Chester J. Straub said, “The District Court’s interpretation of Section 403 conflicts with the statutory text, which … says nothing about prohibiting the assertion of copyright.” “A plain reading of the section demonstrates that the sole consequence of failing to provide sufficient notice is that an alleged infringer may mitigate his actual or statutory damages by asserting the innocent infringement defense,” Straub said. So the imposition of attorney’s fees for this supposed “violation” of the act, Straub said, meant that the wrong legal standard was applied and the lower court had exceeded its discretion. And the same result was reached when the 2nd Circuit reviewed the lower court’s imposition of fees based on West’s other prelitigation and litigation conduct. “A party’s good faith refusal to cooperate with a suspected infringer prior to the filing of suit is not a proper ground for the award of attorneys’ fees to the prevailing party in a subsequent suit,” he said. FEDERAL RULES Moreover, Straub said, Judge Martin’s criticism of a motion by West to dismiss the suit based on a lack of justiciability under Federal Rule of Civil Procedure 12(b)(1), which he denied, “essentially punishes West for availing itself of a right provided by the Federal Rules, namely moving to dismiss the plaintiff’s complaint.” Martin had cited West’s motion as one example of the company’s bad faith in his award of attorneys’ fees. Finally, Straub noted that HyperLaw had listed “dirty tricks” and “threats” by West both before and during the litigation, but because there was no indication that Martin relied on those allegations, Straub said the court was remanding for clarification on whether the charges played any role in the decision to award fees. Judge Sonia Sotomayor and Eastern District Judge Arthur D. Spatt, sitting by designation, joined in the opinion. Carl J. Hartmann III, Paul J. Ruskin and Alan D. Sugarman, all sole practitioners, represented HyperLaw. James F. Rittinger and Joshua M. Rubins, of Satterlee Stephens Burke & Burke, represented West Publishing Co.

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