O'Well Novelty Co v. Offenbacher ( 2000 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
O'WELL NOVELTY COMPANY,
LIMITED, A Taiwan Corporation,
Plaintiff-Appellant,
No. 99-1949
v.
OFFENBACHER, INCORPORATED,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Deborah K. Chasanow, District Judge.
(CA-97-2095-DKC)
Argued: June 7, 2000
Decided: August 1, 2000
Before WIDENER, WILKINS, and WILLIAMS, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: Surjit Paul Singh Soni, THE SONI LAW FIRM, Pasa-
dena, California, for Appellant. Charles Lester Simmons, Jr., GOR-
MAN & WILLIAMS, Baltimore, Maryland, for Appellee. ON
BRIEF: M. Danton Richardson, Leo E. Lundberg, Jr., THE SONI
LAW FIRM, Pasadena, California, for Appellant. Francis L. Gorman,
GORMAN & WILLIAMS, Baltimore, Maryland, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
O'Well Novelty Company, Ltd. sued Offenbacher, Inc. in the
United States District Court for the District of Maryland, alleging that
Offenbacher infringed O'Well's copyright, in violation of the Copy-
right Act of 1976, by importing and selling copies of miniature
lighted porcelain houses from O'Well's 1996 copyrighted collection
without O'Well's authority. After a seven-day trial, the jury returned
a verdict for Offenbacher, finding, among other things, that O'Well
had failed to prove by a preponderance of the evidence that (1) the
1996 collection of porcelain houses was an original creative work, (2)
the individual houses were copyrightable, and (3) Offenbacher had
infringed O'Well's copyright. The jury also found that Offenbacher
had proven by a preponderance of the evidence that O'Well had
knowingly failed to advise the Copyright Office of facts that might
have led to a rejection of O'Well's copyright application. The district
court accordingly entered judgment for Offenbacher. The court subse-
quently denied O'Well's post-trial motion for judgment as a matter of
law, for a new trial, or to alter or amend judgment, and awarded
Offenbacher attorneys' fees and costs. O'Well noted a timely appeal
of these rulings. Finding no reversible error, we affirm.
I.
Viewed in the light most favorable to Offenbacher, the prevailing
party, see Harris v. L & L Wings, Inc., 132 F.3d 978, 980 (4th Cir.
1997), the evidence adduced at trial is as follows. O'Well is a Tai-
wanese corporation in the business of creating, producing, distribut-
ing, and marketing miniature porcelain lighted houses. O'Well's
porcelain houses were created by independent sculptors in Taiwan
working out of their own studios. The sculptors based their designs
upon photographs of houses supplied by O'Well from books, maga-
zines, and catalogs. The extent to which the sculptors copied the pho-
2
tographs in designing the houses is a point of dispute in this case.
Once a sculptor finished a clay model of a house, O'Well supplied the
completed model to Chiu Yi Industrial Art Company, Ltd., a Chinese
corporation, which would create a mold from the model for produc-
tion.
In April 1996, O'Well applied for a copyright registration in its
porcelain houses, apparently seeking a copyright for its entire collec-
tion of houses created between 1992 and 1996 (the 1996 Collection).
O'Well completed its application for a certificate of registration on a
Form TX and submitted with the application its catalog of houses. On
the application, O'Well indicated that it sought copyright in the
"[e]ntire text and photographs." (App. of Exs. Vol. I No. 1.) The
application did not indicate that the work was a"collective" work or
that the porcelain houses were derivative in nature. The registration
for this copyright became effective on April 23, 1996. In February
1997, O'Well filed a corrective application that indicated that O'Well
sought a copyright in the sculptures of the houses as well as the text
and photographs in the catalog. The amended registration became
effective on March 10, 1997.
Offenbacher is a Maryland retailer that sells miniature porcelain
lighted houses during the Christmas season. Offenbacher is a member
of the Marathon Buying Group, a group of four American retailers
who combine their purchase orders from Asia in order to obtain vol-
ume discounts. In 1994 and 1995, Offenbacher, acting as a member
of the Marathon Buying Group, purchased porcelain houses from
O'Well. In both years, O'Well's deliveries to Offenbacher were late.
Moreover, in 1995, some of O'Well's deliveries to Offenbacher con-
tained the incorrect model houses. Accordingly, in 1996, Offenbacher
and the rest of the Marathon Buying Group purchased their porcelain
houses from a different Taiwanese corporation, Taiwan Novelty. Tai-
wan Novelty purchased its houses from Chiu Yi, which made some
of the houses for Taiwan Novelty in 1996 from the same molds it had
used to make O'Well's houses in 1994 and 1995.
O'Well subsequently filed suit against Offenbacher in district court
alleging that Offenbacher infringed O'Well's copyright in the 1996
Collection, in violation of the Copyright Act of 1976, by selling the
porcelain houses purchased from Taiwan Novelty. On cross-motions
3
for summary judgment, the district court granted partial summary
judgment to Offenbacher, finding that O'Well was barred from recov-
ering attorneys' fees under section 412 of the Copyright Act because
the alleged infringement predated the effective date of O'Well's
copyright registration in the sculptures. O'Well filed an amended
complaint and the case proceeded to trial. After a seven-day jury trial,
the jury returned a verdict in favor of Offenbacher. As reflected on
its verdict sheet, the jury found, among other things, that O'Well had
failed to prove by a preponderance of the evidence that (1) the 1996
collection of porcelain houses was an original creative work, (2) the
individual houses were copyrightable, and (3) Offenbacher had
infringed O'Well's copyright. The jury also found that Offenbacher
had proven by a preponderance of the evidence that O'Well had
knowingly failed to advise the Copyright Office of facts that might
have led to a rejection of O'Well's copyright application. By order of
February 18, 1999, the district court entered final judgment in favor
of Offenbacher.
Offenbacher subsequently filed a motion for an award of attorneys'
fees as a prevailing party pursuant to section 505 of the Copyright
Act. O'Well filed a post-trial motion for judgment as a matter of law
pursuant to Federal Rule of Civil Procedure 50(b); for a new trial pur-
suant to Federal Rule of Civil Procedure 59(a); or to alter or amend
judgment pursuant to Federal Rule of Civil Procedure 59(e). In its
motion, O'Well argued, among other things, that judgment as a matter
of law or a new trial was warranted because the jury's findings were
not supported by the evidence and that a new trial was warranted
because the court erred in its instructions to the jury on the first sale
doctrine and on co-ownership. By memorandum opinion and order of
June 4, 1999, the district court denied O'Well's post-trial motion and
granted in part and denied in part Offenbacher's motion for attorneys'
fees. O'Well filed a timely notice of appeal from both the district
court's order entering final judgment in favor of Offenbacher and the
district court's order denying O'Well's post-trial motion and granting
Offenbacher attorneys' fees.
II.
On appeal, O'Well sets forth several contentions of error. First,
O'Well contends, the district court erred in denying O'Well's post-
4
trial motion for judgment as a matter of law or a new trial because
the jury's verdict was not supported by the evidence and the jury was
not properly instructed on the applicable law. Second, O'Well asserts,
the district court erred in failing to amend the judgment to avoid man-
ifest injustice. Finally, O'Well argues, the district court erred in
awarding attorneys' fees to Offenbacher as a prevailing party under
the Copyright Act because such an award is prohibited by section 412
of the Copyright Act, and, alternatively, an award is not warranted
under the circumstances of this case. We address these arguments in
turn.
A.
First, O'Well argues that the district court erred in denying its post-
trial motion for judgment as a matter of law or a new trial because
the jury's verdict was not supported by the evidence and the jury was
not properly instructed on the applicable law. We review a district
court's denial of a Rule 50 motion for judgment as a matter of law
de novo, viewing the evidence in the light most favorable to the non-
movants. See Chaudhry v. Gallerizzo, 174 F.3d 394, 404-05 (4th
Cir.), cert. denied, 120 S. Ct. 215 (1999). We review a district court's
denial of a Rule 59 motion for a new trial for abuse of discretion. See
Cline v. Wal-Mart Stores, Inc., 144 F.3d 294, 301 (4th Cir. 1998).
Applying these standards of review, "[t]he verdict is permitted to
stand unless, under Rule 50(b), no substantial evidence is presented
to support the award, or, under Rule 59, the verdict is against the clear
weight of the evidence, or is based upon evidence which is false, or
will result in a miscarriage of justice." Mattison v. Dallas Carrier
Corp., 947 F.2d 95, 100 (4th Cir. 1991) (internal citation and quota-
tion marks omitted).
1.
O'Well challenges the district court's denial of its post-trial motion
for judgment as a matter of law or a new trial based upon the jury's
verdict. In particular, O'Well argues that the evidence presented at
trial was insufficient to support the jury's findings that the 1996 Col-
lection was not an original creative work, that none of the works
underlying the 1996 Collection was an original creative work, that
O'Well knowingly failed to advise the Copyright Office of facts that
5
might have occasioned a rejection of O'Well's copyright, that O'Well
was not the owner of the copyright in any of the works underlying the
1996 Collection, that Chiu Yi was authorized to produce and sell the
houses in 1996, that Offenbacher had not infringed O'Well's copy-
right in the 1996 Collection, and that Offenbacher had not infringed
O'Well's copyright in any of the works underlying the 1996 Collec-
tion.
The Copyright Act of 1976 grants copyright protection to "original
works of authorship fixed in any tangible medium of expression,"
including "sculptural works." 17 U.S.C.A.§ 102(a) (West 1996). To
establish a claim of copyright infringement, a plaintiff must show "(1)
ownership of a valid copyright, and (2) copying of constituent ele-
ments of the work that are original." Feist Publications, Inc. v. Rural
Tel. Serv. Co., 499 U.S. 340, 361 (1991). A certificate of copyright
registration made before or within five years of the first publication
of the work constitutes prima facie evidence of a copyright's validity.
See 17 U.S.C.A. § 410(c) (West 1996). A defendant may rebut the
presumption of a copyright's validity by showing that the work was
not original or that the copyright registration was invalid. See Fonar
Corp. v. Domenick, 105 F.3d 99, 104-05 (2d Cir. 1997).
In returning a verdict for Offenbacher, the jury found, among other
things, that neither the 1996 Collection nor the underlying works were
original creative works that were copyrightable. As the Supreme
Court has observed, "[t]o qualify for copyright protection, a work
must be original to the author." Feist, 499 U.S. at 345. "Original, as
the term is used in copyright, means only that the work was indepen-
dently created by the author (as opposed to copied from other works),
and that it possesses at least some minimal degree of creativity." Id.Because a "slight amount" of creativity suffices to satisfy the original-
ity requirement, "the vast majority of works make the grade quite eas-
ily, as they possess some creative spark, no matter how crude, humble
or obvious it might be." Id. (internal quotation marks omitted). A col-
lective work qualifies as original if "the author make[s] the selection
or arrangement independently (i.e., without copying that selection or
arrangement from another work)" and the selection or arrangement
"display[s] some minimal level of creativity." Id. at 358.
O'Well argues that the evidence presented was insufficient to sup-
port the jury's finding that the 1996 Collection was not an original
6
creative work because the evidence showed that O'Well selected 212
houses in particular for inclusion in the 1996 Collection and excluded
many others. We disagree. At trial, the following colloquy took place
between Offenbacher's counsel and Davis Chiu, one of O'Well's
principals:
Q. Does this collection include every house that O'Well
has ever created?
....
A. That means before 1996?
Q. Yes.
A. Before 1996, right?
....
A. Yes. This is it from '92, '93, '94, '95, '96.
Q. Does it -- are there houses that were created in 1992
through 1996 that are not in this collection?
A. No.
(J.A. at 1081-82.) O'Well contends that Chiu's testimony cannot be
interpreted as stating that O'Well automatically included every house
it made between 1992 and 1996 in the 1996 Collection because Chiu
qualified his answer immediately thereafter by stating "[t]hat means
almost -- yeah" and subsequently testified that he could not remem-
ber the particular model number of a house he was shown because
"until now there are over 450 style [sic] we design." (J.A. at 1082,
1083.) The jury reasonably could have interpreted Chiu's testimony
that O'Well designed 450 different styles of houses to refer to the
number designed up until the time of Chiu's testimony. The jury also
reasonably could have given little credence to Chiu's qualification of
"almost" in light of his unequivocal testimony-- repeated, no less --
that all of O'Well's houses created between 1992 and 1996 were
7
included in the 1996 Collection. The fact that Offenbacher did not
introduce evidence of any prior collection that O'Well copied in cre-
ating the 1996 Collection is irrelevant because the jury reasonably
could have concluded that O'Well's selection of houses to include in
the 1996 Collection was a purely ministerial act devoid of any inde-
pendent judgment. We, therefore, conclude that the jury's finding that
the 1996 Collection was not an original creative work was sufficiently
supported by the evidence.
O'Well also argues that the evidence presented was insufficient to
support the jury's finding that the underlying works were not original
creative works because the evidence indicated significant variations
between the source material and the finished product. We disagree.
The jury was presented with a house from another manufacturer,
Department 56, as well as the source material relied upon by
O'Well's sculptors, and concluded that O'Well's houses were not
original creative works. Although we recognize that the quantum of
creativity required to satisfy the originality requirement is fairly low,
we decline to second-guess a jury's finding on a subject uniquely
within the jury's ken. See North Coast Indus. v. Jason Maxwell, Inc.,
972 F.2d 1031, 1034-35 (9th Cir. 1992) (concluding that question of
whether plaintiff's work was original or was substantially similar to
preexisting work was a question for the jury). We, therefore, conclude
that the jury's finding that the underlying works were not original cre-
ative works was sufficiently supported by the evidence.
In sum, we hold that the jury's findings that neither the 1996 Col-
lection nor the underlying works were original creative works were
sufficiently supported by the evidence. Because these findings rebut
O'Well's claim to a valid copyright in the 1996 Collection and the
underlying works, and, thus, provide sufficient support for the jury's
verdict in favor of Offenbacher, we need not discuss the rest of
O'Well's contentions of error regarding the jury's verdict. We, there-
fore, affirm the district court's denial of O'Well's post-trial motion
for judgment as a matter of law or a new trial based upon O'Well's
challenge to the jury's verdict.
2.
O'Well also challenges the district court's denial of its post-trial
motion for a new trial based upon the court's instructions to the jury
8
on originality, burdens of proof, authorship, joint ownership, the first
sale doctrine, infringement, and invalidity. A court is not "required to
accept all the suggested instructions offered by the parties." Hardin
v. Ski Venture, Inc., 50 F.3d 1291, 1294 (4th Cir. 1995). Rather, "[t]he
test of the adequacy of jury instructions is whether the jury charge,
construed as a whole, adequately states the controlling legal principle
without misleading or confusing the jury." Chaudhry, 174 F.3d at
408. "A set of legally accurate instructions that does not effectively
direct a verdict for one side or the other is generally adequate."
Hardin, 50 F.3d at 1294. Moreover, "[e]ven when jury instructions
are flawed, there can be no reversal unless the error seriously preju-
diced the plaintiff's case." Id. at 1296.
We first address whether the district court erred in its instructions
on originality, because if we conclude that those instructions were
adequate, we need not proceed further given our conclusion above
regarding the jury's findings on originality. O'Well challenges the
district court's instruction that "[e]ach of the separate works in the
collective work must itself be copyrightable" and the court's instruc-
tion that a derivative work must be a "substantial variation from any
preexisting work" in order to be original.1 (J.A. at 1734, 1737.) As an
_________________________________________________________________
1 The district court gave the jury the following instructions on original-
ity:
Plaintiff's claim in this case is that it is the owner of a collec-
tive work protected by the Copyright Act. A collective work is
a work, such as a periodical issue, anthology or encyclopedia, in
which a number of contributions constituting separate and inde-
pendent works in themselves are assembled into a collective
whole. Each of the separate works in the collective work must
itself be copyrightable.
To create a collective work, the author selects the preexisting
materials in such a way that the resulting whole constitutes an
original and creative work of authorship. Original means that the
compiler independently made his selection and did not copy
from others. Creative means that the selection is more than typi-
cal, mechanical or routine and is not so obvious or commonplace
as to be expected or inevitable.
....
9
initial matter, Offenbacher contends that O'Well failed properly to
preserve its objections to the district court's instructions on original-
ity, and, therefore, any error in these instructions does not mandate
reversal absent plain error. Federal Rule of Civil Procedure 51 pro-
vides that "[n]o party may assign as error the giving or the failure to
give an instruction unless that party objects thereto before the jury
retires to consider its verdict, stating distinctly the matter objected to
and the grounds of the objection." Fed. R. Civ. P. 51 (emphasis
added). "Rule 51 must be read in conjunction with Rule 46," City of
Richmond v. Madison Management Group, Inc., 918 F.2d 438, 453
(4th Cir. 1990), however, which provides in relevant part that "it is
sufficient that a party, at the time the ruling or order of the court is
made or sought, makes known to the court the action which the party
desires the court to take or the party's objection to the action of the
court and the grounds thereof," Fed. R. Civ. P. 46. In other words,
"where the district court was fully aware of the plaintiff's position,
and the district court had obviously considered and rejected that posi-
tion, strict enforcement of Rule 51 would exalt form over substance."
City of Richmond, 918 F.2d at 453 (internal quotation marks omitted).
O'Well repeatedly objected to the district court's jury instruction
that a copyrightable collective work required that the separate individ-
ual works be copyrightable. Accordingly, O'Well properly preserved
_________________________________________________________________
. . . Under the copyright law, originality means that the work
was independently created by the author. The fundamental pre-
requisite for copyright protection is that the work be the original
product of the person or entity claiming copyright.
A derivative work is a work based upon one or more preexist-
ing works. The copyright in a derivative work extends only to
the material contributed by the author of such work, as distin-
guished from the preexisting material in creating the work. To
support a copyright, there must be at least some substantial vari-
ation from any preexisting work, not merely a trivial variation
such as might occur in translation to a different medium. The
author of a derivative work does not acquire an exclusive right
to or in the preexisting material merely by authoring the deriva-
tive work.
(J.A. at 1734-35, 1736-37.)
10
that challenge for appeal. Our review of the record reveals, however,
that O'Well failed specifically to object to the portion of Offen-
bacher's proposed instruction on originality stating that "[t]o support
a copyright, there must be at least some substantial variation, not
merely a trivial variation such as might occur in translation to a differ-
ent medium," (Attach. to Appellant's Reply Br.), and failed to object
to similar language in the district court's jury instruction on original-
ity. Accordingly, we review this challenge only for plain error, see
Rice v. Community Health Ass'n, 203 F.3d 283, 286 (4th Cir. 2000),
and will overlook O'Well's failure to object at the proper time "only
if exceptional circumstances exist such as when the error is so obvi-
ous or so serious that the public reputation and integrity of the judicial
proceedings is impaired," Hafner v. Brown, 983 F.2d 570, 578 (4th
Cir. 1992) (internal quotation marks omitted).
Neither of O'Well's challenges to the district court's jury instruc-
tions on originality possesses any merit. First, the district court's
instruction to the jury that "[e]ach of the separate works in the collec-
tive work must itself be copyrightable" is a correct statement of the
law. See 1 Melville B. Nimmer & David Nimmer, Nimmer on Copy-
right § 3.02, at 3-6 (2000) ("Those compilations that consist of contri-
butions that themselves constitute `works' capable of copyright are
called collective works." (footnotes omitted)). The case law relied
upon by O'Well for the proposition that the underlying components
of a work need not be copyrightable in order for the work itself to be
copyrightable is distinguishable in that it concerns compilations that
are not collective works.2 See Educational Testing Servs. v. Katzman,
793 F.2d 533, 538 (3d Cir. 1986). Second, the district court defined
"substantial variation" as "not merely a trivial variation" in its instruc-
tion to the jury on originality. (J.A. at 1737.) Seen in this light, the
_________________________________________________________________
2 The Copyright Act defines a"collective work" as "a work, such as a
periodical issue, anthology, or encyclopedia, in which a number of con-
tributions, constituting separate and independent works in themselves,
are assembled into a collective whole." 17 U.S.C.A. § 101 (West Supp.
2000). The Copyright Act defines a "compilation" as "a work formed by
the collection and assembling of preexisting materials or of data that are
selected, coordinated, or arranged in such a way that the resulting work
as a whole constitutes an original work of authorship." Id. "The term
`compilation' includes collective works." Id.11
district court's instruction on originality is fully consistent with the
Supreme Court's definition of originality in Feist, and, at the very
least, does not constitute plain error warranting a new trial.
In sum, we hold that the district court's instructions to the jury on
originality, taken as a whole, adequately stated the controlling legal
principles. Having already concluded that the jury's findings that nei-
ther the 1996 Collection nor the underlying works were original cre-
ative works were sufficiently supported by the evidence, see supra
Part II.A.1, our conclusion that the district court's instructions on
originality were adequate means that we need not discuss the rest of
O'Well's challenges to the jury instructions because any error in those
instructions could not have seriously prejudiced O'Well's case. We,
therefore, affirm the district court's denial of O'Well's post-trial
motion for a new trial based upon the jury instructions.3
B.
Second, O'Well argues that the district court erred in denying its
motion to alter or amend judgment pursuant to Rule 59(e). Specifi-
cally, O'Well contends that Rule 59(e) relief was warranted because
the judgment entered by the district court on February 18, 1999 was
_________________________________________________________________
3 We also reject O'Well's argument, advanced in its post-trial motion
and hidden away in the section of its appellate brief on the standard of
review for jury instructions, that a new trial is warranted because the ver-
dict was "logically incompatible," as evidenced by the jury's responses
to Verdict Interrogatories II.B and II.C. Verdict Interrogatory II.B, which
the jury answered in the negative, asked whether O'Well had proven by
the preponderance of the evidence that it was the owner of the rights to
copyright the houses. Verdict Interrogatory II.C, which the jury answered
in the affirmative, asked whether Offenbacher had proven by the prepon-
derance of the evidence that Chiu Yi was authorized to produce and sell
the houses in 1996. Because the verdict sheet did not instruct the jury to
refrain from answering an interrogatory if it gave a particular answer to
a prior interrogatory, it is entirely plausible that the jury found that
O'Well had failed to prove by a preponderance of the evidence that it
was the owner of rights to copyright the houses, and, in the alternative,
that even if O'Well was the owner of such rights, Offenbacher had
proven by a preponderance of the evidence that Chiu Yi was authorized
to produce and sell the houses.
12
riddled with clear errors of law that would "wreak manifest injustice"
on O'Well and similarly situated copyright holders if allowed to
stand. (Appellant's Br. at 58.) We review a district court's denial of
a Rule 59(e) motion for abuse of discretion, see Pacific Ins. Co. v.
American Nat'l Fire Ins. Co., 148 F.3d 396, 402 (4th Cir. 1998),
keeping in mind that "[i]n general reconsideration of a judgment after
its entry is an extraordinary remedy which should be used sparingly,"
id. at 403 (internal quotation marks omitted). In light of our disposi-
tion of O'Well's preceding arguments on appeal, we have no diffi-
culty concluding that the district court did not abuse its discretion in
denying O'Well's Rule 59(e) motion to alter or amend judgment.
C.
Finally, O'Well argues that the district court erred in awarding
attorneys' fees to Offenbacher as a prevailing party under the Copy-
right Act because the district court's denial of O'Well's claim for
attorneys' fees also bars Offenbacher's claim for attorneys' fees under
the Copyright Act. In the alternative, O'Well argues that the district
court's award of attorneys' fees to Offenbacher was unwarranted
under the circumstances of this case because O'Well did not pursue
this litigation in less than good faith, and O'Well advanced legal and
factual positions that were appropriate under copyright law and con-
sistent with the evidence presented at trial.
The Copyright Act provides that a district court may in its discre-
tion award costs and "may also award a reasonable attorney's fee to
the prevailing party as part of the costs." 17 U.S.C.A. § 505 (West
1996). The Supreme Court has interpreted § 505 as providing discre-
tion to a district court to award attorneys' fees to a prevailing party,
see Fogerty v. Fantasy, Inc., 510 U.S. 517, 533-34 (1994), and has
confirmed that "[p]revailing plaintiffs and prevailing defendants are
to be treated alike," id. at 534. In determining whether to award attor-
neys' fees to a prevailing party under § 505, a district court should
consider the following factors: "(1) the motivation of the parties, (2)
the objective reasonableness of the legal and factual positions
advanced, (3) the need in particular circumstances to advance consid-
erations of compensation and deterrence, and (4) any other relevant
factor presented." Diamond Star Bldg. Corp. v. Freed, 30 F.3d 503,
505 (4th Cir. 1996) (internal quotation marks omitted). We review a
13
district court's grant of attorneys' fees under§ 505 for abuse of dis-
cretion and any factual findings underlying its ruling for clear error.
See id. at 506.
As an initial matter, O'Well contends that the district court was
prohibited as a matter of law from awarding attorneys' fees to Offen-
bacher. In support of this argument, O'Well cites the aforementioned
holding in Fogerty that "[p]revailing plaintiffs and prevailing defen-
dants are to be treated alike." From this holding, and the district
court's pre-trial ruling that O'Well was barred by section 412 of the
Copyright Act from receiving attorneys' fees because the alleged
infringement predated the effective date of O'Well's copyright,
O'Well leaps to the conclusion that Offenbacher also is barred from
receiving attorneys' fees. We do not find this novel assertion to be
persuasive. Viewed in its proper context, the holding from Fogerty
cited by O'Well merely indicates that § 505 empowers a district court
to award attorneys' fees to a prevailing defendant as well as to a pre-
vailing plaintiff. Moreover, by its plain language,§ 412 only applies
to plaintiffs who assert copyright infringement claims and not to
defendants who successfully defend against such claims.4 Finally, it
simply defies logic to conclude that an unsuccessful plaintiff's addi-
tional failure timely to register its copyright serves to bar a court from
awarding attorneys' fees to the prevailing defendant. We, therefore,
reject O'Well's argument that the district court's denial of attorneys'
fees to O'Well also bars an award of attorneys' fees to Offenbacher.
_________________________________________________________________
4 Section 412 of the Copyright Act provides:
In any action under this title, other than an action brought for
a violation of the rights of the author under section 106A(a) or
an action instituted under section 411(b), no award of statutory
damages or of attorney's fees, as provided by sections 504 and
505, shall be made for--
(1) any infringement of copyright in an unpublished
work commenced before the effective date of its registration;
or
(2) any infringement of copyright commenced after first
publication of the work and before the effective date of its
registration, unless such registration is made within three
months after the first publication of the work.
5130 35 12 17 U.S.C.A. § 412 (West 1996) (emphasis added).
14
Alternatively, O'Well contends that the district court abused its dis-
cretion in awarding attorneys' fees to Offenbacher under the four-
factor test set forth in Diamond Star. With regard to the first factor,
the motivation of the parties, the district court concluded that Offen-
bacher was properly motivated to defend the lawsuit brought by
O'Well and that O'Well had taken a position in the case inconsistent
with a position in a separate case. With regard to the second factor,
the reasonableness of the legal and factual positions advanced, the
district court concluded that Offenbacher's legal and factual positions
advanced throughout the litigation were reasonable whereas O'Well
advanced several positions that were unreasonable, including posi-
tions on discovery issues and its belated assertion that it was seeking
to enforce a copyright protection in its collection of houses. With
regard to the third factor, compensation and deterrence, the district
court noted that O'Well was involved in a number of copyright suits
against retailers based upon sales of the porcelain houses and that an
award of attorneys' fees and costs would deter future lawsuits based
upon its registration of the 1996 Collection. Finally, with regard to
other factors, the district court noted that Offenbacher was victorious
on every claim in the lawsuit as well as most of the discovery and evi-
dentiary issues raised before and after trial. Because all four factors
favored an award of attorneys' fees, and the district court's factual
findings underlying its analysis were not clearly erroneous, we con-
clude that the district court did not abuse its discretion in awarding
attorneys' fees to Offenbacher as a prevailing party.
III.
In sum, we hold that the district court did not commit reversible
error in denying O'Well's post-trial motion for judgment as a matter
of law or a new trial challenging the jury's verdict and the district
court's instructions to the jury on the applicable law, in denying
O'Well's post-trial motion to alter or amend judgment, or in awarding
attorneys' fees to Offenbacher as a prevailing party under the Copy-
right Act. We, therefore, affirm the district court's rulings.
AFFIRMED
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