United States: 11th Circuit: Award Of Fees Affirmed In "Objectively Unreasonable" Copyright Action Where Plaintiff No Longer Possessed A Copy Of The Copyrighted Material

On September 24, 2014, in an unpublished opinion the 11^th Circuit denied the appeal of InDyne, Inc. ("InDyne"), which asked the Court to vacate an award of attorneys' fees to Defendants Abacus Technology Corporation, Jerry Reninger, and Matthew Boylan (collectively, "Abacus") in a copyright infringement action in Middle District of Florida.

According to the opinion, Abacus copied portions of InDyne's Program Information System ("PIMS") software in setting up a website for NASA. The District Court held that InDyne failed to present evidence sufficient for a reasonable jury to find that the copied portions of the software were "original and thus deserving copyright protection." This District Court finding was previously affirmed by the 11^th Circuit in InDyne, Inc. v. Abacus Tech. Corp., 513 F. App'x 858 (11^th Cir. 2013) (unpublished).

The case was back before the 11^th Circuit after the District Court awarded attorneys' fees based on three findings: (1) InDyne was "objectively unreasonable" in filing a copyright infringement claim while no longer possessing "a copy of the copyrighted material;" (2) InDyne's motivation for bringing suit was "questionable;" and (3) the purposes of the Copyright Act would be furthered by a deterrence of future litigants suing for infringement without being able to produce the software code.

The 11^th Circuit noted that under 17 U.S.C. § 505 an award of attorneys' fees was in the court's discretion. In reviewing the decision for an abuse of discretion, the panel noted that encouraging objectively reasonable claims "the boundaries of copyright law are demarcated as clearly as possible."¹ Factors considered include frivolousness, motivation, objective unreasonableness, and considerations of compensation and deterrence.

The 11^th Circuit declined InDyne's invitation to revisit the facts with allusions to "massive copyright infringement" and that Abacus "got away with it," citing the law-of-the-case doctrine which "bars relitigation of issued decided by necessary implication, even if they are not addressed explicitly."²

The 11^th Circuit also affirmed the objectively unreasonable standard as InDyne had neither a copy of the copyrighted version of PIMS "or even a clear software revision history." Without this evidence no reasonable jury could find in InDyne's favor. With "chameleon-like," "constantly morphing" software, InDyne had no copyrighted material to point to for its claim.

The District Court's comment on the questionable motivation did not constitute a finding of bad motivation, but it did constitute a finding that this factor did not weigh in InDyne's favor.

Although unpublished, this case serves to reinforce the principle that ill-advised copyright infringement claims face consequences, thus serving to imprint on the bar the importance of giving weight to the appropriate demarcation between a reasonable copyright claim and an expensive one.

The case is Indyne, Inc. v. Abacus Technology Corporation, Jerry Reninger, and Matthew Boylan, Case Number 14-11058, decided September 24, 2014, by the Eleventh Circuit, panelists Carnes, Tjoflat, and Rosenbaum.

Footnotes

[1] Citing MiTek Holdings , Inc. v. Arce Eng'g Co., Inc., 198 F.3d 840, 842-43 (11^th Cir. 1999)

[2] Opinion at p. 4, n. 1.

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