Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_03-cv-05424/USCOURTS-cand-5_03-cv-05424-13/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1121 Trademark Infringement

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Case No. C 03-5424 JF (HRL)

ORDER (1) CLARIFYING AWARD OF COSTS AND ATTORNEYS’ FEES ETC.

(JFLC2)

**E-Filed 7/17/06**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

MICROSOFT CORPORATION,

 Plaintiff,

 v.

SUNCREST ENTERPRISE, et al.,

 Defendants.

Case Number C 03-5424 JF (HRL)

ORDER (1) CLARIFYING AWARD

OF COSTS AND ATTORNEYS’ FEES

WITH RESPECT TO COPYRIGHT

CLAIM; AND (2) DENYING

DEFENDANTS’ REQUEST FOR

ATTORNEYS’ FEES WITH RESPECT

TO LANHAM ACT CLAIMS 

On May 16, 2006, the Court issued an order that, inter alia, granted summary judgment

for Plaintiff Microsoft Corporation (“Microsoft”) and against Defendants Suncrest Enterprise

(“Suncrest”) and Yi-Ling Chen (“Chen”) with respect to Microsoft’s copyright claim. The order

indicated that the Court would award up to $30,000 in costs and attorneys’ fees on the copyright

claim and invited Microsoft to file a declaration setting forth its costs and attorneys’ fees

incurred. Microsoft’s counsel filed such a declaration on May 23, 2006, and on June 6, 2006 the

Court issued an order awarding costs and attorneys’ fees to Microsoft in the amount of $30,000.

At the time it issued the June 6 Order, the Court was unaware that a dispute had arisen

between the parties as to whether the award of costs and attorneys’ fees should run against

Suncrest only, or against Suncrest and Chen. Defendants filed a brief on May 31, 2006, arguing

Case 5:03-cv-05424-JF Document 166 Filed 07/17/06 Page 1 of 4
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Case No. C 03-5424 JF (HRL)

ORDER (1) CLARIFYING AWARD OF COSTS AND ATTORNEYS’ FEES ETC.

(JFLC2)

that any award of costs and fees should not run against Chen individually, but the Court had not

seen this brief at the time it issued the June 6 Order. Microsoft subsequently filed a supplemental

brief on June 20, 2006, arguing that the award should run against Chen individually. At the

Court’s request, Defendants filed a supplemental brief in response on July 14, 2006.

On July 3, 2006, Chen filed a request for an award of attorneys’ fees based upon her

status as a prevailing party on Microsoft’s Lanham Act claims. At the Court’s request, Microsoft

filed a supplemental brief addressing Chen’s request on July 14, 2006.

Both matters thereafter were taken under submission without oral argument.

A. Copyright Claim

Under the Copyright Act, the court in its discretion may award costs and attorneys’ fees

to the prevailing party. 17 U.S.C. § 505; Historical Research v. Cabral, 80 F.3d 377, 378 (9th

Cir. 1996). “District courts should consider, among other things, the degree of success obtained;

frivolousness; motivation; objective unreasonableness (both in the factual and legal arguments in

the case); and the need in particular circumstances to advance considerations of compensation

and deterrence.” Historical Research, 80 F.3d at 379 n.1 (internal quotation marks and citation

omitted).

As the Court acknowledged it its summary judgment order, the evidence in the record

indicates that neither Suncrest nor Chen were willful copyright infringers. However, the

infringement did occur, and Microsoft was put to the trouble and expense of bringing this action. 

The Court therefore awarded statutory damages in the amount of $5,000 and reasonable costs and

attorneys’ fees in the amount of $30,000. These amounts are quite modest in comparison with

the statutory damages, costs and fees that Microsoft sought. In limiting the award of costs and

fees, the Court took into account the fact that Defendants were not willful infringers, that their

arguments were not objectively unreasonable, and that there was no particular need for

deterrence because Defendants no longer were in the business of selling Microsoft products.

Chen argues that the award of costs and fees should not run against her because she

personally did nothing wrong and was found liable for copyright infringement only on a theory of

vicarious liability. The lack of willful misconduct on the part of both Suncrest and Chen was

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Case No. C 03-5424 JF (HRL)

ORDER (1) CLARIFYING AWARD OF COSTS AND ATTORNEYS’ FEES ETC.

(JFLC2)

taken into account in fixing the award of costs and attorneys’ fees. The Court is not aware of any

decision in which two defendants are found liable for copyright infringement, but only one is

subjected to an award of costs and attorneys’ fees under § 505. Moreover, costs and fees clearly

can be awarded based solely upon vicarious liability. See, e.g, Superhype Publishing, Inc. v.

Vasiliou, 838 F.Supp. 1220, 1227 (S.D. Ohio 1993) (awarding attorneys’ fees against defendant

who was found liable for copyright infringement on a vicarious liability theory). Accordingly,

the Court clarifies that the award of costs and attorneys’ fees in the amount of $30,000 runs

against both Suncrest and Chen. 

B. Lanham Act Claims

Under the Lanham Act, the court in its discretion may award attorneys’ fees to the

prevailing party in “exceptional cases.” 15 U.S.C. § 1117(a). In the Ninth Circuit, a case is

considered “exceptional” under § 1117(a) if the case is “groundless, unreasonable, vexatious, or

pursued in bad faith.” Cairns v. Franklin Mint Co., 292 F.3d 1139, 1156 (9th Cir. 2002)

(internal quotation marks and citation omitted). While Microsoft did not prevail on its Lanham

Act claims against Chen, the Court concludes that Microsoft’s claims were not so groundless or

unreasonable to warrant an award of attorneys’ fees to Chen. Accordingly, Chen’s motion will

be denied.

ORDER

(1) The Court clarifies that the award of costs and attorneys’ fees in the amount of

$30,000 on the copyright claim runs against both Suncrest and Chen; and

(2) Chen’s motion for attorneys’ fees is denied. 

 

DATED: 7/17/06

__________________________________

JEREMY FOGEL

United States District Judge

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Case No. C 03-5424 JF (HRL)

ORDER (1) CLARIFYING AWARD OF COSTS AND ATTORNEYS’ FEES ETC.

(JFLC2)

This Order has been served upon the following persons:

Jennifer N. Chiarelli Jchiarelli@perkinscoie.com, skumagai@perkinscoie.com

John C. Gorman jgorman@gormanmiller.com

Craig Alan Hansen chansen@gormanmiller.com

Andrew K. Jacobson andy@bayoaklaw.com

Shawn T. Leuthold leuthold@aol.com 

Case 5:03-cv-05424-JF Document 166 Filed 07/17/06 Page 4 of 4