Fair Use-Costs and Fees

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7^th Circuit Court of Appeals

Case Name: Live Face on Web, LLC v. Cremation Society of Illinois, Inc.

Case No.: 22-1641

Officials: Scudder, Kirsch, and Jackson-Akiwumi, Circuit Judges.

Focus: Fair Use-Costs and Fees

The Cremation Society of Illinois and its co-defendants sought to recover their attorney’s fees after defeating Live Face on Web’s copyright claims against them. The district court denied their request, concluding that because the defendants only prevailed due to an intervening Supreme Court decision, awarding fees would not advance the purposes of the Copyright Act’s symmetrical fee-shifting provision. That conclusion strays from the law, so the 7^th Circuit vacates and remands for reconsideration.

The defendants each acquired licenses for computer code from Live Face, for $328. In response, Live Face initiated a copyright infringement lawsuit against them, seeking damages totaling around $483,000. It’s worth noting that Live Face is currently engaged in approximately 200 ongoing copyright litigation cases. Following a period of over five years and with summary judgment proceedings in progress, Live Face managed to secure the dismissal of its lawsuit against the defendants with prejudice. The basis for this successful dismissal was Live Face’s argument that a recent Supreme Court case in 2021 (Google) rendered the defendants’ fair-use defense insurmountable. Subsequently, the defendants made a motion for the recovery of legal fees. However, the district court denied this motion, asserting that the defendants hadn’t achieved victory due to their defenses but rather due to an unexpected and unforeseen shift in the legal landscape.

The Seventh Circuit vacated and remanded. According to the Copyright Act, prevailing parties are entitled to recuperate costs and fees, as specified in 17 U.S.C. 505. Four non-exclusive factors play a role in this determination: the merit of the lawsuit in question; the motivations driving the losing party’s decision to initiate or oppose the lawsuit; the objective reasonableness of the claims put forth by the losing party; and the necessity to consider aspects of compensation and deterrence. Contrary to the district court’s assessment, the defendants indeed achieved victory due to their defensive strategies, which notably included their fair-use defense. Even if Google did introduce substantial changes, the defendants raised defenses beyond fair use, which conceivably could have nullified Live Face’s claims.

Affirmed in part, vacated in part, and remanded.

Decided 08/11/23

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