Thursday, October 31, 2019

Lack of personal jurisdiction leads to fee award in (c)/false advertising case

International Inst. of Management v. Organization for Econ. Cooperation & Development, No. 2:18-cv-01748-JCM-GWF, 2019 WL 5578485 (D. Nev. Oct. 29, 2019)

Not gonna lie, I’m here for the defendants, the OECD and Joseph Stiglitz.   IIM, a small Nevada think tank, alleged that they “stole credit” for IIM’s work on using non-GDP factors to measure the well-being of countries. In 2005, IIM published a two-page paper titled “Gross National Well-being (GNW) Index” that “generally discusses the idea of using non-GDP factors to measure the well-being of countries and provides seven factors that such an index might use,” but doesn’t show how to use them. A second six-page paper in 2006, “The American Pursuit of Unhappiness,” is similar.

The OECD’s Commission on the Measurement of Economic Performance and Social Progress conducts research on measuring the well-being of countries. Stiglitz, a resident of New York, is its chair and substantially contributed to various reports and articles that the commission published. In 2009, it published a 291-page report titled “Report by the Commission on the Measurement of Economic Performance and Social Progress,” “which discusses the limits of GDP as an indicator of economic performance. The report also extensively addresses problems with various measurement techniques and how to improve upon existing methods to determine the well-being of countries.”  In 2011, the OECD created the Better Life Index, which uses non-GDP factors to measure the well-being of countries, and published an interactive website that millions of people have used to compare the well-being of countries. Stiglitz also allegedly sells a book on which contains material from IIM’s works. IIM sued for copyright infringement, vicarious/contributory copyright infringement, unfair competition, and false advertising in violation of the Lanham Act (*cough*Dastar*cough*). 

Although this could’ve been a case testing what it means to creatively compile facts, the court instead granted defendants’ motion to dismiss for lack of personal jurisdiction. Defendants sought a fee award.

Defendants were prevailing parties under the Copyright Act even though they didn’t get dismissal on the merits or dismissal with prejudice. The relevant factors for whether there should be an award: objective unreasonableness, degree of success obtained, absence of chilling effect, and the need to advance considerations of compensation and deterrence. A claim is objectively unreasonable where the party advancing it “should have known from the outset that its chances of success in th[e] case were slim to none.”  Here, “IIM sought to hale a New York citizen and a foreign organization into a Nevada federal court based on the bare allegations that defendants operated the Better Life Index on a website, sold a book with allegedly infringing materials on, and published the 2009 report online.” And, relying on “unambiguous Ninth Circuit authority,” the court held that “merely uploading materials on a passive website and placing products in the stream of commerce are not affirmative acts that directly target Nevada.” Thus, the suit was objectively unreasonable.

Degree of success on the merits: “This dismissal does not bar IIM from refiling in another jurisdiction, but it does terminate further litigation in Nevada. While this is likely not defendants’ preferred outcome, it is without question that they have obtained at least a modicum of success.”

Chilling effect: IIM didn’t argue that it lacked the resources to pay an award or that it will be deterred from seeking to enforce valid copyrights in the future. But IIM argued that an award would deter suits against large-pocketed defendants. The court disagreed.  “That this case may have been brought in good faith and was not dismissed on the merits has little bearing on whether victims of copyright infringement will continue to bring suit. An award of attorney’s fees here serves only to discourage suits without an objectively reasonable basis for jurisdiction.”

Compensation and deterrence: “A successful defense furthers the purposes of the Copyright Act just as much as a successful infringement suit does.”

Overall, a fee award for the copyright claims was warranted.

Was this an exceptional Lanham Act case? Doesn’t matter, because fees were warranted under the Copyright Act (and I infer that, because the jurisdictional issue was the same for both, all work counts as work done on the copyright claims).  But the court found that fancy New York prices were unreasonable and instead used a lodestar of $400/hour for counsel who charged more than that, and it also found that the total hours billed were unreasonable for stating the hours of each individual in a single, large increment of time, so it reduced the lodestar by 10%.  Total award for Stiglitz: a bit shy of $58,000 (plus costs).  For OECD: over $52,000 (plus costs).

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