A blog about patent, copyright and trademark law in the U.S. District Court
for the Southern District of New York

Court Denies Attorneys’ Fees to Defendant Securing Stipulation of Dismissal With Prejudice

 In a January 26, 2015 ruling, Judge Katherine Polk Failla refused to award attorneys’ fees to a defendant in a copyright case who secured a stipulation of dismissal with prejudice early in the case. The Court did find that the defendant was a “prevailing party” under the Copyright Act fee provision, writing:
Here, the parties agreed to a stipulation of dismissal with prejudice pursuant to Rule 41(a)(1)(A)(ii), because Plaintiff’s opportunity to voluntarily dismiss unilaterally pursuant to Rule 41(a)(1)(A)(i) had expired upon [the defendant’s] filing of an answer. Such a dismissal “has the effect of a final adjudication on the merits favorable to defendant and bars future suits brought by plaintiff upon the same cause of action.” . . . Therefore, because the stipulation of dismissal “immunize[s] [the] defendant from the risk of further litigation on the merits,” . . . Defendant has prevailed.

Judge Failla nevertheless denied an award of fees on the merits, finding that the plaintiff’s claim neither was objectively baseless, frivolous nor brought in bad faith. In response to the defendant’s argument that the plaintiff should have known it was not a proper party, the Court noted the defendant’s tangled business affairs with those of its co-defendant, and wrote that the plaintiff had no factual basis by which to verify [the defendant’s] description of [its business] relationships.” Judge Failla further wrote that her ruling denying in part of a companion defendant’s motion to dismiss suggested that the plaintiff’s claims were not frivolous.
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