IP Law Daily Fees awarded to defendant in infringement case voluntarily dismissed by Malibu Media
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Thursday, January 14, 2021

Fees awarded to defendant in infringement case voluntarily dismissed by Malibu Media

By Donielle Tigay Stutland, J.D.

Litigation conduct by "copyright troll" Malibu Media warranted award of fees to prevailing defendant.

The federal district court in Chicago has granted an award of attorney fees to a defendant in a copyright infringement suit brought by adult film company Malibu Media, LLC (Malibu). Referencing that other courts have nicknamed the company a "copyright troll," the court found the weight of the factors suggested that the previously dismissed case was frivolous and unreasonable when Malibu "continued to withhold documents supposedly showing that it had a good-faith basis for naming Mullins." While defendant William Mullins had acknowledged that he was the subscriber to the IP address responsible for the infringement, the case had been dismissed voluntarily by Malibu, and Malibu repeatedly would not turn over evidence from pre-filing that would show whether or not Malibu had a good-faith basis for the suit (Malibu Media, LLC v. Mullins, January 13, 2021, Durkin, T.).

Background. In September 2018, Malibu Media, an adult film company, filed a complaint under the Copyright Act against John Doe for the illegal downloading, copying, and distribution of eleven films. The complaint later named William Mullins as the defendant when Malibu learned through a third-party subpoena that Mullins was the subscriber to the IP address that was associated with the downloads. Mullins sought to have the case dismissed; he argued that although he was the subscriber assigned to the IP address at issue, others had access to his Wi-Fi.

Mullins sought to dismiss the case. However, the court found that Malibu had stated a plausible claim for relief, even if it was not clear from the pleadings who used his IP address to download and distribute the movies. The court instructed the parties to begin discovery. Mullins then filed a counter-claim for declaratory relief that he was not the infringer, as well as an answer to the complaint.

Malibu then dismissed its claim because "the time and expense needed ‘to bear out [Mullins’] infringer status’ outweighed any potential recovery." Malibu ultimately conceded that it "believes that the infringement was done by someone other than Mullins." The court noted that Malibu arrived at this conclusion after learning that Mullins "had not updated his internet password for over ten years, shared that password with neighbors and guests, and owned a Wi-Fi system that reached nearby condominiums."

Mullins filed a motion to receive his attorney fees. The court noted that at numerous points, before and after the case was dismissed, Malibu had failed to provide Mullins with the digital evidence that supposedly formed the basis of its good-faith complaint. Malibu’s attorney also filed to withdraw as counsel and indicated that she could not get Malibu to turn over the requested information.

Attorney fees under the Copyright Act. The court looked to the Copyright Act, which provides that, as a matter of its discretion, "the court may … award a reasonable attorney’s fee to the prevailing party as part of the costs." When a copyright case is dismissed with prejudice, the defendant is presumed to be the "prevailing party."

Judge Durkin noted that to determine whether or not to award fees, the court will look at the following factors from Fogerty v. Fantasy, Inc., "frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence."

Malibu contended that its claim against Mullins was neither "frivolous nor objectively unreasonable." Judge Durkin disagreed, although he noted that "at first blush, Malibu’s claim does not seem frivolous." Malibu filed suit against the subscriber of the IP address where the films were downloaded, copied, and distributed. However, the court indicated that as Malibu stated, it only names defendants in copyright infringement cases when "we ha[ve] a good-faith belief that the subscriber [is], in fact, the infringer." Yet, in this case, Malibu repeatedly failed to share any information from its pre-filing investigation that suggested that Malibu in fact had a good faith reason to name Mullins as a defendant. Noted the court, "my suspicion is raised when documents which would prove that the case was brought in good faith aren’t being turned over. It’s that simple."

The court next looked at the factor of motivation. Malibu asserted that awarding fees to Mullins would be inappropriate because "there are no facts in the record to support a finding that it had improper motivations in filing its complaint." The court instead pointed to records showing that Malibu has made a name for itself in the news for "having a penchant" for litigation and has been labeled as a "copyright troll." The judge also noted that the company has been criticized by other courts has having a litigious business strategy which involves getting infringers to settle in order to avoid court fees.

The court also took other considerations into account, such as the strength of the case, as well as the amount of damages received. Noting that previously the Seventh Circuit has stated that when the prevailing party in a copyright case is the defendant, "who by definition receives not a small award but no award, the presumption in favor of awarding fees is very strong." Additionally, the court noted that because the documents are now public, there are embarrassing allegations against Mullins still in the public domain. Given the weight of both the Fogerty factors, as well as the additional considerations, the court determined it was appropriate to award attorney fees to Mullins.

This case is No. 1:18-cv-06447.

Attorneys: Joel Alexander Bernier (Boroja, Bernier & Associates PLLC) for Malibu Media, LLC. Joseph Curtis Edmondson (Law Offices of J. Curtis Edmondson) for William Mullins.

Companies: Malibu Media, LLC

MainStory: TopStory Copyright TechnologyInternet IllinoisNews GCNNews

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