in the copyright act it was not just trying to punish those who took on reasonable positions it wanted to encourage parties to advance important principles even where the other side's arguments are good indeed i would say especially where the other side's arguments are good when a defendant is trying to decide whether to fight for a principle the availability of attorneys fees can make all the difference in that decision and in turn can make all the difference in whether the public's rights are vindicated the second circuit standard flouts the plain language of the statute undermines congress's goal and is inconsistent with this court opinion and overdye it does nothing to encourage a defendant who has a good defense but is facing off against a powerful adversary armed with a reasonable position that encouragement h it didn't we would have to have been more than that it would have had circuit precedent it could have been found willfully infringing correct not if i were going to bet i would say yes to that question would you i'm sorry have evaluated what the incentives for both sides were so wildly would have had an enormous economic incentive to advance its position courts and would have had much less of an incentive to do anything other on their lawyers than the john milius of the world and that their also more risk averse because they have less money so you know given those two factors doesn't your rule actually as minds before they ever think about attorneys fees being awarded against them is how am i going to pay for this and critical answer to that question will be in many circumstances there is the availability of a charity but that's  only one side of the question i mean what you're doing is you're upping the stakes generally so that current sand is going to know well it's true i might be able to get my fees back but at the same time i run the risk of having to pay is probably going to be paying its lawyers more than i'm going to be paying mine and i'm very risk sensitive as a curtseying type so that's a huge deal for me to increase my stakes that much do i understood that that will be part of the calculus now in the ninth circuit where the test that we are suggesting predominate and in every circuit that doesn't accept the second circuit's position which is to say every other circuit there is not a dearth of copyright litigation people in could things position or fighting ahead and while you start it's because district courts have been intrusted with making reasonable judgement and asking the question was starving artists show up and starving artists defend and they want in the second circuit but then the truth is there are very few starving artists in any copyright litigation so yes they may show up but they won't be able to pay for their own lawyer and suggested one of the solutions to that problem is for the district court to take into account the relative financial resources of the parties is that correct yes your honor is one of the factors so what worried about attorneys fees in order to protect the interests in a one point eight billion dollar a year business for which on this particular issue it stood to gain hundreds of millions of dollars that wasn't worried about whether it would have to pay  israel's hundred twenty five thousand dollars in fees critics saying on the other hand would have been worried about that under under any standard any of the standard work he stands to gain attorney fees for irrelevant was what was the significance of the wind to the public so also i mean one thing that concerns me about a test like that mr rosenkranz is it's very hard for people to make judgments x and think and to figure out what their chances are it's very hard to predict and if you're concerned about the curtains of the world the davids in these kinds of suits what you might want is a pretty clear safe harbor another words if i'm taking a reasonable position i'm not going to be stuck with the other side's fees which are likely to dwarf my own and that's something that somebody can predict as opposed to this twenty two factor test which is i just don't know how th you do have a job and part at that job they do things that we would do worse not better and one of the things that they know is the case in front of them and what we said in our case was it's up to them as long as they act reasonably so you started with a factor which i guess they could have taken into account nothing in our law prohibits it in fact it encourages it so what's the problem what is it are you saying we should in fact change what we second circuit scenes not to have taken account of what we said which is that all considerations all considerations that are consistent with the purposes of the copyright act can be relevant it depends on the case period absolutely you're right although i would add a little bit more i you want to there's another thing which i don't know how to do the other thing is whether you really advanced the law i mean maybe at the time marbury vs madison was viewed by many percent are now winning if not more in the second circuit it's almost eighty nine percent it means that when you are talking about the reasonableness of a a winning part position in most cases the copyright holder has a reasonable position so and the defendant by losing tends to have an unreasonable position hardly ever so going back to justice briar's question how do we articulate what the second circuit is doing wrong without necessarily endorsing all of the factors of the ninth circuit und the simple answer is what the second circuit did was to pick one factor out of a jumble of possible factors and say this will be the one kit that gets substantial weight and what just reports of do with that is then hold up that one factor and ask is there anything that outweighs that factor when in the context of a particular case that might not be the most important factor but i see the course for the doing house would be it's ok to have it one among others but not a presumption  availability of these would create the right litigation centive incentives that is for both parties with the right result for the public the district court should and should consider each of the fogarty factors and do with through the lens of the purposes of the copyright act it should also consider the significance and nature of the wind and the litigation incentives on both sides of the green including any disparity in the answer will depend on a district court specific balancing but i'll do the balance that i would do that i would argue to the district court i would say well first while we did win the something really big here although it wasn't huge headwinds the precedent was in its favor good for wiley it gets credit for that but wiley had every incentive to protect hundreds of millions of dollars it didn't need attorneys fees in order to incentivize it curtseying  guy who was a student with attorneys fees ways already got a six hundred thousand dollar judgment against him that would be my advocacy i could see a district court adopting and i could see a district court going the other way but a common law will rampant copyright litigation in the ninth circuit and in the other circuits that don't start with a presumption against attorneys fees at the other side was reasonable can i ask mr rosenkranz one of the things that confused me a positions sort of aggressive tactics those are the only circumstances in one hundred seventy eight cases in which defendants have ever had to write these awarded in their favor in this is something that we have yet to hear or you have no idea why at least from these briefs i have no idea why the copyright numbers come out the way they do one finis therefore i'm thinking quite honestly  reject mackie bender that i think you could say we go back and say have they taken what used to be an all factors pass and have they in fact said and then we could all go home safely say what they've done here is they've said we're never going to  hardly ever going to take a favorable account of having clarified the law and in your view we should say as well don't say never don't lay down a standard there are too many different kinds of cases he way are of trying to  it through the lens of the purposes of the copyright act and the second is by the way it was about me more than footnote nineteen it was about incentivizing each side correctly don't forget about that so consider the incentives on both problem with that is that different judges are going to have very different views about what will further the purposes of the copyright act don't you think both the second circuit and the ninth circuit i'm sorry the seventh circuit think that their rules are the rules that best for the purposes of the copyright yes your honor and that's why both of them are wrong i would love the court to adopt the seventh circuit standard but it to free free judges in every case  faithful to the purposes of the act and that's very different it means you don't do something that's going to undermine the act as opposed to sitting there in figuring out whether the basic purpose of the act is to what extent to encourage authors at the expense of the readers or the expense of those people who do not want to undergo huge transaction costs getting a hold of that office all right so we have several different conflicting purposes you want to bring them in when you say further and the court smith mr chief justice and may please the court this is a case i submit where the lower courts did everything right as courts have been doing in copyright cases for more than a century the district court focus first on the question of whether or not the losing party here wile y had taken on reasonable litigation position on the law wrong facts and concluded that dobbs he had not and then it looked at all the other actually relevant factors including all the factors that had been suggested by cursings counsel and ninth circuit for the last three years and this is what i'm coming out with in the ninth circuit prevailing defendants have received these twenty times and lost seventeen times no fifty percent in the second circuit prevailing defendants have received fees three times and lost sixteen times so a huge difference if i look at what's happening with prevailing given discretion to award fees looking at whether the losing party had a substantial case or not is something that instinctively you arrive at the standard you are you know seated in octane for the patent it's the standard that you announce here in martin for the removal statute of that the law that was reported to congress when they reenacted this this provision in one nine hundred seventy six in the brown study in the register report congress understood that what the what the way the rule works is that fees are being shifted when one side or the other has an was you do when when they when the plate when it's offended when when the defendant wins if you have a rule that says we're going to shift these against reasonable plaintiffs and you're going to have the was a complete coin flip because the law was totally indeterminate nobody knew whether the first sale doctrine applied here or didn't apply here there was no law in the second circuit when the case was filed by the time the case gets to this court this court has already ruled f that the on the issue said no but it was it was a coin flip and in that situation the last thing you want to do to the parties if you're trying to get them to keep litigating so that they get the issue gets clarified is telling oh by the way we're going to raise the stak whoever wins is going to get fees or whatever loses are going to have to pick up that's just not the way risk averse profit maximizing participants in litigation behave if you want to suppress litigation by opposing the british will presumptively in this kind of case because people simply aren't going to keep fighting they're going to find a way to get out of the case if you understand the petitioners position they take the argument you've just made about the necessity for continued litigation and then add a david  if the results of the litigation is to clarify the law then whichever party has the good fortune of being the winner wins the coin flip gets its feet that's what they say generally is have been guarding from that he's using already about at least  say just don't say never and indeed the second circuit did say never said a court should not awarded tourney's fees where the case is novel or close because such a litigation reasonably explained in my in the right place i'm in page eighteen a nineteen a of the of the petition maybe i'm reading the wrong opinion that's been you know that in the end what they do is they quoted outweigh this factor if i'm a district judge and i'm thinking you know who likes to be overruled by the second circuit it does seem as though it stands a pretty strong signal to district courts that this is the key factor and that they are not perhaps you know probably not in their lifetimes going to see a case in which that factor is outweighed the factor that can outwait and has outweighed it is litigation meant misconduct so you end up in the second circuit with a rule very much like fees but if we have two reasonable parties litigating appropriately and we don't they simply don't know who's going to win because the law is unclear we don't want to raise the stakes in that situation because those are the people you want to keep fighting in this case is a perfect illustration at the point where this case is going to go to this court you've already divided forty four nobody knows where justice kagan is going to come out on the issue first curtseying has to decide whether to file that's certain he knows at that point that he's go get free representation but if you had petitioners rule in effect he would also be you know that he had a fifty percent chance of losing in this court and having to pay all of john wiley to turn a fisa mansion that he's getting free representation to you you mention the fact that he was represented it seems to me that's quite an intrusion into the relationship between the party and and counsel i mean you look at it and say oh well you know you have discovery about whether what the relationship was between him and circuit kind of disagreed with them on that and in a footnote in their opinion but the main thing is that you don't have a rule that says if you find that certification mr curtseying you're going to be fifty percent chance you're going to have a big bill at the end of it and even from the point of view of john pay not only all their lawyers fees but all of this i mean are you seriously suggesting it's a tough call for them whether to oppose the serpent titian or not but maybe not but i think it's important to look at the economic situation they have six hundred thousand dollars judgment and they would have known under his rule they had a fifty to litigate this case but i don't think you can do these things sort of after the fact and they said each party particular incentives you need a rule that says to people here's how we're going to decide these things so you have predictability so people can tell whether or not this is but the the conduct was was intentional but the law was fifty fifty that was it was a complete coin flip and so it seems to me that while he says we don't want to put him it discretion here the reality is you have to have some structure to the decision making so people can predict what the outcome is going to be and incentivise otherwise you just have a black box you say which district judge takes six factors that will we're not going to really tell you how to decide them and then you're not doing what requirement the fact is that you look at was it badly litigated should it not have been litigated with a reasonable basis which was abusive conduct that's a fact you should look at that's what courts have always looked at why why would you look at something else i mean that is points out in their brief plaintiff decide when to bring cases defendants don't decide when to be defendants and there are a lot of intentional infringers of copyrights out there in the world that we have now and so people would be bizarre in a way have a higher percentage of claims they were reasonable because they decide what case to bring and they know that they're going to be spending money and this is the investor in this case and they that they decide to go ahead whereas defendants are simply often just caught you know they hit it simply means that the facts on the ground are leading to a difference in you in the outcome in percentages which we have a lot of different percentages here but you know a lot of defendants are getting fees to even in the second circuit according to their own statistics looking at hundreds and hundreds of cases in the second circuit in the district courts i think that there is a lot of discretion that one can exercise in deciding whether to include cases in your county or not include cases in your county whether you include the judgments whether you include declaratory judgment situations whether you include situations where the court says as a technical matter you can't get fees because your motion was late but in the alternative if i were to consider it i would go on to award or not award you fees anyway so i think that there is some ground drop out those default judgments which as mr smith indicated are situations where the fee motion is effectively unopposed where i think the defendant often looks very unreasonable by not having shown up to defend the case and where the fee amount is quite small by  necessity there's not much has happened in the case then the number sort of look much more similar fifty nine point seven percent for plaintiff fifty three percent for defendants so if there's not this huge gulf between the percentages of time when the plaintiff and defendant are getting fees at least by my count as i say i recognize that there are different ways to do this count so i think if they call these numbers with a little bit of a grain of salt but i don't think any standard in the world would give you cool numbers and plaintiffs and defendants getting attorneys fees and matthew vandar yes is neutral it is even handed on its face it says very clearly that plaintiff and defendant should be treated in the same way and if the court thought that that somehow were being carried out properly in the second circuit i think the court could emphasize that and it would be a reason to reject the second circuit franklin which was a case that involved a statute that much like the statute here just gave broad discretion to district courts without a lot of standards to guide them and what the court said in that case is this question isn't whim in order for like cases to be treated a like this or courts just question should be guided in certain ways so that there can be predictability and so that there can be that principle of justice can be upheld when you're given any absence of express satisfy restrictions you didn't have the sort of situation you have here we're concerned about encouraging se that's true that when the case is remanded to the person been unsuccessful in removing that's when fees are awarded but nevertheless like anything shifting stuff is taking into account incentives on both sides whether you should try to remove the case whether you should move to remain on the case if you're on the other side and what happens in the copyright world because of this court's forward a decision is that those incentives are judged as to plaintiffs and defendants because both of them can get fees but i don't think the underlying policies are different in marking the court wasn't looking at anything that was specific to that statute to its history or to any policy that was specific to that statute at all but what the court said was objective reasonable is the touchstone and yes it may be true that in some cases where the losing party has been objective we reasonable fees are appropriate in any event because this is an ethanol matter and we don't want to restrict its records discretion and it's hard to imagine every single case that could possibly come up in the future and that is equivalent to what the second circuit has done here so it's very consistent with  one example comes from the six circuit and other cases called the music and bridgeport music and that was a situation where a plaintiff indiscriminately brought hundreds and hundreds and hundreds of claims some of which were objective be reasonable and some of which were not objectively reasonable and what the court so there was yes it's true that your claim was eventually reasonable even though you didn't succeed but you proceeded in this on reasonable fashion and so there's a strong deterrence factor that's playing in here we don't want people to do this  want to stop people from doing this in the future and so we're going to work attorneys fees in that situation and that is related i think to litigation misconduct but it's not exactly the same thing and it is a deterrent it's focusing on the deterrence factor in the photo there's another example that's an example from the pertinent if you were to adopt an approach like approach where you took financial condition of the parties into account if you're going to do that and i think you would certainly need to look to see whether someone who appeared to be an impecunious party was actually represented pro was not responsible for their fees but i take some issue with what fisher's counsel said that the financial condition of the parties is something that courts look to when they're deciding whether to make a few ward in the first instance i'm not aware of any other circumstance where the courts look to the financial condition of the parties under a fee shifting statute to decide whether to award fees on a granular level in other words they look to the specific finances of the specific party before them they certainly look at it when it comes time to decide what the amount of a fee award should be if they've already decided that they're going to award fees and that i think is perfectly appropriate and you'll see this reports in the second circuit under the matthew vendor standard doing exactly that if they have very unreasonable pro se plaintiff for instance they will say circumstances to invents considerations of compensation and turn loose the reasonable fact no reasonable position is one among forces there could be others well why not stop right there for the margaret was a poor man maybe he didn't even want a joke they think he was trying to try to create a situation where this country would have a structure of judicial review i mean when they take things like that why no well i mean  i don't know if it has to be consistent but yeah why are we suddenly picking this one thing out of what could be a bunch of things for a number of reasons first of all if you look at the factors that are mentioned in somebody they actually many of them center around objective reason want us there's another example of another reason though that's very grounded in the copyright act itself and that is the history of the copyright act and the ratification that congress engaged in in one nine hundred seventy six when it chose to readopt essentially the same language from the one thousand and one copyright act as to which courts have to exercise their discretion over many years worn a groove that said generally one losing party is reasonable these are not going to be appropriate that's equivalent to the second circuit standard congress had every reason to know that that was a law under the existing reason to know that it was true if you were thinking of this solely as a policy matter if you didn't think that that evidence was all that overwhelming why is it that this factor should be first among equals for that i think a lot of the reasons that mr smith explained with respect to incentives when you make that factor important you're encouraging reasonable arguments you're discouraging unreasonable arguments you're increasing the chances that close cases where both sides are reasonable are going to actually get let it go added to their conclusion and therefore the ginsburg question which got picked up through the course of the argument i think really gets to the nub of the matter the magic language in mr smith's presentation is that the second circuit has adopted the patent  standard the patent act standard is different in of octane means anything it is we read the words the congress actually wrote exceptional circumstances this court defined it exactly the way that the copyright act was an exceptional circumstance standard it wasn't there is not a single case that the government or world wiley has cited not one case that adopts the matthew bender standard across the with what we're saying the rule was final point if we're talking about incentives the difference between my position and mr smith's position is that he wants to rule that decides up front for all district court what the value is to put on reasonable that's an awfully hard task for a district judge to perform what are the you know what is what well for the purposes of the copyright act or what is most faithful to the copyright act district court judges to see that very differently and there won't be any consistency if that's what they're required to to do are authorized to do your honor what will emerge is what's emerged in the ninth circuit a common law of equity where courts are following each