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Klein & Heuchan, Inc v. Co-Star Realty Information

December 7, 2011

KLEIN & HEUCHAN, INC., PLAINTIFF,
v.
CO-STAR REALTY INFORMATION, INC., AND CO-STAR GROUP, INC., DEFENDANTS.



ORDER

THIS CAUSE comes before the Court upon Plaintiff/Counter-Defendant Klein & Heuchan, Inc.'s Motion for Attorneys' Fees and Costs (Dkt. 143), Motion for Appellee Attorneys' Fees and Costs (Dkt. 158), and Defendants/Counter-Plaintiffs CoStar Realty Information, Inc. and CoStar Group, Inc.'s respective responses (Dkts. 163 and 159). The Court, having considered the motions and responses, and being otherwise advised, concludes that the motions should be denied with respect to Klein & Heuchan's request for attorneys' fees, and granted with respect to its request for costs.

Background

Plaintiff/Counter-Defendant Klein & Heuchan, Inc. ("K&H") is a real estate brokerage firm based in Clearwater, Florida. Defendants/Counter-Plaintiffs CoStar Realty Information, Inc. and CoStar Group, Inc. (collectively, "CoStar") are, together, a national commercial real estate information service provider that operates an internet database of this information.

CoStar collects information on over 1,000,000 active commercial real estate listings in the United States and the United Kingdom. CoStar employs field researchers who collect the information and take pictures of the properties. The pictures taken by the field researchers are registered with the United States Copyright Office. CoStar makes the collected information and pictures available over the internet to customers who pay a license fee. With the subscription, customers are generally permitted to make limited reproductions of the photographs contained in the database and make limited use of the compilation of information maintained in the database.

Counter-Defendant Scott Bell was a real estate broker who worked for Coldwell Banker Commercial NRT ("Coldwell") from September 2005 to November 2006. During his time at Coldwell, Bell was given a subscription to the CoStar database. Bell could access the CoStar database using a unique username and password but his subscription was associated with Coldwell's license agreement with CoStar.

Sometime around December of 2006, Bell began working for K&H as an independent sales professional. Though Bell's subscription was supposed to end when he left Coldwell, Bell continued to access the CoStar service using the username and password associated with his Coldwell associated subscription.

Upon learning of Bell's continuing use of the CoStar service, K&H filed a declaratory judgment action seeking a court determination of their rights and obligations as they relate to CoStar. CoStar filed a counterclaim against Bell for direct copyright infringement, breach of contract, and violation of 18 U.S.C. §1030; and against K&H for contributory and vicarious copyright infringement.

Although the Court found Bell liable for direct infringement, this Court ultimately concluded (after a bench trial) that K&H was not liable for either contributory or vicarious copyright infringement. (Dkt. 141). Co-star later appealed the decision to the Eleventh Circuit Court of Appeals, which affirmed. (Dkt. 162).

K&H now moves for an award of attorneys' fees and costs with respect to fees incurred in the district court action and on appeal.

Discussion

A. Basic Legal Standard

In copyright cases, the decision to award attorneys' fees is within the sound discretion of the Court. 17 U.S.C. § 505 ("[T]he Court in its discretion may allow the recovery of full costs by or against [a] party...[and] may also award a reasonable attorney's fee to the prevailing party as part of the costs."); Cable/Home Commc'ns Corp. v. Network Prods., Inc., 902 F.2d 829, 853 (11th Cir. 1990). In deciding whether to award fees, a Court should consider whether the position of the losing party was (1) frivolous or (2) objectively unreasonable, (3) the losing party's motivation in litigating the action; and (4) the need to advance considerations of compensation and deterrence. Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n. 19 (1994). In balancing these factors, the Eleventh Circuit has stressed that a court should not consider the issue of whether the losing party can afford to pay the prevailing party's fees but instead must focus on whether an award of fees will further the goals of the Copyright Act. Mitek Holdings, Inc. v. Arce Eng'g Co., Inc., 198 F.3d 840, 842 (11th Cir. 1999).

B. Factor One: Frivolousness

K&H has not argued that Co-star's claims were frivolous. Moreover, the discussion below regarding the "objective unreasonableness" factor makes clear that they were not. The Court's finding that Co-star's claims were not frivolous thus weighs against an awarding of attorneys' fees.

C. Factor Two: Objective Unreasonableness

Just because a defendant prevails at trial, it does not follow that the plaintiff's position was therefore objectively unreasonable. Maxwood Music Ltd. v. Malakian, 722 F. Supp. 2d 437, 439 (S.D.N.Y. 2010). Indeed, to hold otherwise would be to establish a per se entitlement to fees for the prevailing defendant, which would belie the Supreme ...


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