Gonzalez, David B. v. Transfer Technologie ( 2002 )

In the
United States Court of Appeals
For the Seventh Circuit
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No. 01-4090
DAVID B. GONZALES,
Plaintiff-Appellant,
v.
TRANSFER TECHNOLOGIES, INC.,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 00 C 3969—Charles P. Kocoras, Chief Judge.
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SUBMITTED JULY 25, 2002—DECIDED AUGUST 23, 2002
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Before POSNER, KANNE, and EVANS, Circuit Judges.
POSNER, Circuit Judge. Gonzales owns copyrights on
several designs intended to be imprinted on T-shirts. With-
out bothering to get a license from him the defendant pro-
duced and sold temporary tattoos that copy his designs,
infringing four of his copyrights. When he discovered the
infringements he sued the defendant, which promptly
stopped producing and selling the infringing tattoos. By
agreement of the parties the case was submitted to the judge
on a paper record. He awarded Gonzales the minimum stat-
utory damages of $750 (see 17 U.S.C. § 540(c)(1)) for each of
the infringed copyrights, for a total of $3,000 (Gonzales did
2 No. 01-4090
not seek an award of actual damages), but he declined to
award Gonzales any attorneys’ fees (see 17 U.S.C. § 505), on
the ground that “Transfer’s actions, though willful, are not
the kind of flagrant behavior that would justify an award of
attorneys’ fees.” Gonzales appeals from this ruling.
Section 505 of the Copyright Act does not set forth a
standard for awarding attorneys’ fees to a prevailing party;
it merely authorizes such awards. In Fogerty v. Fantasy, Inc.,
510 U.S. 517 (1994), the Supreme Court was asked to align
interpretation of section 505 with that of the civil rights
attorneys’ fees awards act, 42 U.S.C. § 1988, under which
a prevailing plaintiff is entitled to fees virtually as a mat-
ter of course but a prevailing defendant only if the suit is
frivolous. E.g., Christiansburg Garment Co. v. EEOC, 434
U.S. 412, 422 (1978); Kahn v. Gallitano, 180 F.3d 829, 837 (7th
Cir. 1999); National Home Equity Mortgage Ass’n v. Face, 283
F.3d 220, 224 (4th Cir. 2002). The Court in Fogerty rea-
soned that copyright defenses are as important as copy-
right claims (a successful defense enlarges the public do-
main, an important resource for creators of expressive
works) and therefore there should be no thumb on the
scales. It did not define the unitary standard to be applied
to prevailing parties in copyright suits but in a footnote,
quoting a lower-court opinion, listed the following non-
exclusive factors to guide determination: “frivolousness,
motivation, objective unreasonableness (both in the fac-
tual and in the legal components of the case) and the need
in particular circumstances to advance consideration of
compensation and deterrence.” Fogerty v. Fantasy, Inc., supra,510 U.S. at 535 n. 19.
Since the factors aren’t exclusive, and seem rather miscel-
laneous and ill-assorted, they leave the decision on whether
to grant or deny attorneys’ fees to the prevailing party in a
copyright case pretty much to the discretion of the district
judge, subject to necessarily highly deferential appellate
No. 01-4090 3
review—for the vaguer a standard to be applied by a trial
judge, the greater his roaming room. But we do have to
insist that the judge explain the grounds for his decision in
sufficient depth to enable their reasonableness to be deter-
mined; otherwise there would be no appellate control at all
over such decisions. And so we have not hesitated in the
past to remand section 505 determinations when the district
judge had not supplied us with sufficient indication of his
reasoning process to enable us to decide whether the de-
termination was reasonable. Susan Wakeen Doll Co., v.
Ashton-Drake Galleries, 272 F.3d 441, 457-58 (7th Cir. 2001);
Builders, Inc. v. Hoffmeyer, 140 F.3d 728, 730-31
(7th Cir. 1998); FASA Corp. v. Playmates Toys, Inc., 108 F.3d
140, 144 (7th Cir. 1997); Budget Cinema, Inc. v. Watertower
Associates, 81 F.3d 729, 731-32 (7th Cir. 1996); Magnuson v.
Video Yesteryear, 85 F.3d 1424, 1432 (9th Cir. 1996); Histor-
ical Research v. Cabral, 80 F.3d 377, 379 (9th Cir. 1996)
(per curiam).
This is such a case. The fact that Transfer did not persist
in its infringing activities after being sued is no doubt a
point in its favor, but without amplification is not a strong
one. The fact that a criminal does not persist in committing
crimes after he’s indicted doesn’t argue strongly in his
favor. The infringement was willful; and willful infringe-
ments involving small amounts of money cannot be ade-
quately deterred (and remember “the need in particular cir-
cumstances to advance consideration of . . . deterrence”)
without an award of attorneys’ fees. No one can prosecute
a copyright suit for $3,000. The effect of the district court’s
decision if universalized would be to allow minor infringe-
ments, though willful, to be committed with impunity, to be
in effect privileged, immune from legal address. The smaller
the damages, provided there is a real, and especially a
willful, infringement, the stronger the case for an award of
attorneys’ fees. We urge this point (and we are not the first
to make it—see, e.g., Magnuson v. Video Yesteryear, supra, 85
4 No. 01-4090
F.3d at 1432; Quinto v. Legal Times of Washington, Inc., 511 F.
Supp. 579, 581 (D.D.C. 1981); Paul Goldstein, Copyright
§ 12.3.2.2 (2d ed. ; Melville B. Nimmer and David
Nimmer, Nimmer on Copyright § 14.10 (2002)—not as a
rule to be mechanically applied but rather as a considera-
tion for district judges to weigh seriously; we go so far as
to suggest, by way of refinement of the Fogerty standard,
that the prevailing party in a copyright case in which the
monetary stakes are small should have a presumptive
entitlement to an award of attorneys’ fees. The judge in
this case may have had a good reason to find the presump-
tion rebutted but this we cannot tell from his extremely
brief discussion. The case must therefore be remanded
for further consideration consistent with this opinion.
VACATED AND REMANDED.
A true Copy:
Teste:
_____________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-97-C-006—8-23-02