Supreme Court ruling is a blow to copyright trolling business-model

In 2013, the Supreme Court heard Kirtsaeng, a copyright case brought by the publisher Wiley, who argued that legal books became illegal when brought into America, because their copyright licenses were nation-specific.

The implications of Wiley's theory were nuts: companies could place arbitrary limits on the use of anything manufactured abroad and use copyright law to enforce them.

Thankfully, the Supreme Court rejected Wiley's theory. But that wasn't the end of it. Kirtsaeng's lawyers spent more than $2M on the case, and two courts said that they were not entitled to recover their fees from Wiley -- sending the message to future defendants in bogus copyright suits that even if they won, they'd lose.

The Supremes just reversed the lower courts and asked them to reconsider whether to let Kirtsaeng's lawyers recover fees, establishing a new test for whether defendants in copyright cases are entitled to fees. Even if the lower court ultimately denies fees to Kirtsaeng, the possibility that a future defendant can recover fees changes the calculus for copyright trolls -- any egregious claim by a troll with deep pockets will now attract contingency lawyers on the other side who'll happily monetize the outrage of trolls' victims in order to get fees out of the troll.

The decision doesn't mean Kirtsaeng's counsel will ultimately get their fees, but it means the justices want the lower courts to change the way they consider awarding fees to prevailing parties in copyright lawsuits. As it turned out, courts across the country were all over the map concerning fees, and the Supreme Court wants an end to that disparity.

According to Kagan:

Section 505 of the Copyright Act provides that a district court “may... award a reasonable attorney’s fee to the prevailing party.” 17 U. S. C. §505. The question presented here is whether a court, in exercising that authority, should give substantial weight to the objective reasonableness of the losing party’s position. The answer, as both decisions below held, is yes—the court should. But the court must also give due consideration to all other circumstances relevant to granting fees; and it retains discretion, in light of those factors, to make an award even when the losing party advanced a reasonable claim or defense. Because we are not certain that the lower courts here understood the full scope of that discretion, we return the case for further consideration of the prevailing party’s fee application.

Supreme Court revives $2M fees dispute in copyright case over resold textbooks [David Kravets/Ars Technica]