Fees in false advertising and copyright cases

Allen v. Ghoulish Gallery, 2008 WL 474394 (S.D.Cal.)

Previously: Allen won a false advertising claim but lost his copyright claims against the Ghoulish Gallery, a competing producer of “haunt portraits,” at a bench trial. The trial, at which Allen represented himself, lasted five days; the court extended Allen a lot of leeway in recognition of his pro se status, including accepting all his trial documents even though most were late. Most of the trial, and much of the briefs, focused on the copyright claims, which concerned the parties’ respective websites.

Both parties sought fees. In denying Allen’s (late) fee request, the court noted that Allen now admitted that he was not proceeding entirely pro se but had been contracting work to his attorney. Regardless, Allen was not entitled to fees under the Lanham Act, which allows fee awards to prevailing parties in exceptional cases. Though Allen prevailed, the court never found that defendants engaged in intentional false advertising or other misbehavior.

The Ghoulish Gallery fared better on its motion for fees. Under the Copyright Act, fees are not limited to exceptional cases. They may be awarded at the court’s discretion, and the standards are the same for prevailing plaintiffs and defendants (except that a prevailing plaintiff may only receive them if the copyright was timely registered). Factors to be considered include: “frivolousness; motivation; objective unreasonableness (both legal and factual); the need to advance considerations of compensation and deterrence; and promotion of the Copyright Act’s objectives.”

The court found that Allen’s copyright claim was frivolous and objectively unreasonable. He claimed to own a copyright in the entirety of his “Haunted Memories Changing Portrait Website.” For the first 14 months of the case, including the discovery period, he was represented by counsel, and the only discovery he produced relevant to his copyright claim was a copy of the registration certificate, not any evidence of the website content itself. He didn’t produce any evidence of that until the penultimate day of trial, at which time he proffered an unauthenticated CD-ROM. The court admitted screenshots from the CD-ROM. Though the court held he had a valid compilation copyright, there was no presumption of validity.

Allen was unclear about what he alleged was infringing; the court examined nine individual website components as well as Allen’s selection, coordination, and arrangement. The court found that none of the individual elements (such as a “Buy It Now” button and a charcoal-colored frame for the images of the portraits) were copyrightable. Comparing the selection, coordination, and arrangement of Allen’s website with the Ghoulish Gallery website under the objective test, the court found only one substantial similarity – the use of Ruben font for the business name and Rudelsberg font for the tag line. The evidence showed that both fonts are publicly available and commonly used in the “haunt” industry. Under the subjective test, the court found no substantial similarity.

Overall, the minimal evidence on Allen’s side led the court to conclude that a fee award to the Ghoulish Gallery was justified. Along with unreasonableness and frivolousness, the court determined that compensation and deterrence principles supported a fee award, given the time and expense to which the Ghoulish Gallery was put in defense, “especially in light of Defendant’s counsel having to invest substantially more time in dealing with a pro se plaintiff than they would if dealing directly with counsel.” Moreover, Allen has sued the Ghoulish Gallery’s principal for defamation in other litigation. “A fee award is appropriate so that Plaintiff may fully consider and appreciate the monetary, emotional and physical costs of litigating unsubstantiated claims.”