Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_14-cv-04383/USCOURTS-cand-5_14-cv-04383-8/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

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Case No. 14-CV-04383-LHK

ORDER DENYING DEFENDANTS’ MOTION FOR ATTORNEY’S FEES AND COSTS

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Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

EVGENY EPIKHIN and DMITRI REDLIKH,

Plaintiffs,

v.

GAME INSIGHT NORTH AMERICA, 

et al.,

Defendants.

Case No. 14-CV-04383-LHK 

ORDER DENYING DEFENDANTS’ 

MOTION FOR ATTORNEY’S FEES

AND COSTS

Re: Dkt. No. 87

Plaintiffs Evgeny Epikhin (“Epikhin”) and Dmitri Redlikh (“Redlikh”) (collectively, 

“Plaintiffs”) sued Defendants Game Insight North America, Cooper Media Corp. d/b/a Game 

Insight, and Game Insight Global Limited d/b/a GIGL (collectively, “Game Insight”) and Game 

Garden, LLC (“Game Garden”) (together, with Game Insight, “Distributor Defendants”), as well 

as Fly High Games (“Fly High”) and Yury Pomortsev (“Pomortsev”) (all together, “Defendants”). 

On November 11, 2015, the Court granted Defendants’ motion to dismiss. ECF No. 83. 

Defendants now move for attorney’s fees and costs as “prevailing parties” under the Copyright 

Act, 17 U.S.C. § 505. ECF No. 87. Having considered the submissions of the parties, the relevant 

law, and the record in this case, the Court DENIES Defendants’ motion for attorney’s fees and 

costs.

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I. BACKGROUND

A. Factual Background

The crux of the underlying dispute is who owns the rights to Cat Story, a free mobile 

application (“app”) in which players build a virtual village for cats shipwrecked on an island and 

send the cats on various quests and adventures. ECF No. 58 (First Amended Complaint, or 

“FAC”) ¶¶ 1, 25. Plaintiffs allege that the app that became Cat Story was first conceived in early 

2012 at South Port Studios, LLC (“South Port”), a Russian corporation owned by Redlikh and 

managed by Pomortsev. Id. ¶¶ 23–25, 31. At the time, Plaintiffs say, the app was called 

PussyVille. Id. ¶ 26. 

At the time that PussyVille was in development, Plaintiffs, Pomortsev, and Maxim 

Bakanovich (“Bakanovich”) were co-owners of Game Garden, a California Corporation. Id. ¶ 10, 

15, 32. However, due to various difficulties, the relationship between Game Garden’s four owners 

began to deteriorate beyond repair. In mid-2013, Plaintiffs negotiated with Pomortsev and 

Bakanovich to sell Plaintiffs’ ownership interests in Game Garden. Id. ¶ 48–50. Plaintiffs 

eventually sold their interests in Game Garden to friends of Pomortsev and Bakanovich on 

September 11, 2013. Id. The sale agreement did not mention PussyVille. Id. ¶ 51. At the time of 

the sale, Plaintiffs believed, based on alleged misrepresentations by Pomortsev, that PussyVille 

was no longer in development. Id. ¶¶ 39, 41, 51.

Following the sale of Plaintiffs’ interests in Game Garden, Game Garden and Game 

Insight began distributing Cat Story through the Apple App Store, Google Play, Amazon, and 

Windows Mobile. Id. ¶¶ 56–59. Since September 2013, there have been over a million 

downloads of Cat Story through these various platforms. Id. ¶¶ 106, 115. 

Plaintiffs allege that Cat Story contains significant art, graphics, and other copyrightable 

material created by South Port during the development of PussyVille; that the rights in this 

copyrightable material were properly assigned to Plaintiffs; and that these rights are infringed by 

Distributor Defendants’ distribution of Cat Story. FAC ¶¶ 28, 60, 71–72. Defendants counter that 

Cat Story was developed solely by Fly High, which then licensed the app to Distributor 

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Defendants. Id. ¶ 107; ECF No. 44 (Pomortsev’s counterclaims). 

Before filing the instant lawsuit, Plaintiffs filed for copyright protection for PussyVille and 

Cat Story. FAC ¶¶ 62, 64. At the time of the two copyright applications, Plaintiffs allegedly had 

“no access to the original works created at South Port by South Port employees and contractors” 

because of the dispute with Pomortsev and Bakanovich. Id. Thus, in support of each application, 

Plaintiffs deposited: (1) the source code of Fairy Farm, a game developed by South Port on which 

PussyVille was allegedly based; and (2) various images of characters in Cat Story that are 

allegedly identical to or derivative of PussyVille. Id. The U.S. Copyright Office registered 

PussyVille and Cat Story, effective September 24, 2014. Id. ¶¶ 63, 65. 

B. Procedural Background

On September 29, 2014, Plaintiffs filed the complaint via attorney Shannon Gallagher 

(“Gallagher”). ECF No. 1. Plaintiffs brought causes of action for direct copyright infringement 

under 17 U.S.C. § 501 (first cause of action), contributory copyright infringement (third cause of 

action), and vicarious copyright infringement (fourth cause of action) against Distributor 

Defendants. Id. ¶¶ 61–73, 100–09. Plaintiffs brought additional causes of action against 

Pomortsev and Fly High. Specifically, Plaintiffs alleged fraud (second cause of action) and breach 

of contract (sixth cause of action) against Pomortsev. Id. ¶¶ 74–99, 118–23. Plaintiffs also 

asserted a cause of action for declaration of copyright ownership against Fly High (fifth cause of 

action). Id. ¶¶ 110–17. Lastly, Plaintiffs brought a cause of action against all defendants for 

deceptive business practices under California’s Unfair Competition Law (“UCL”), Cal. Bus. & 

Prof. Code § 17200 et seq. (seventh cause of action). Id. ¶¶ 124–30.

On May 11, 2015, Pomortsev and Fly High answered Plaintiffs’ complaint. ECF Nos. 43, 

44. Fly High also filed counterclaims against Plaintiffs for misrepresentation in violation of the 

Digital Millennium Copyright Act, 17 U.S.C. § 512(f), and declaration of copyright ownership. 

See ECF No. 43 at 17–19. Pomortsev filed counterclaims against Plaintiffs for declaration of 

copyright invalidity and breach of contract. See ECF No. 44 at 18–19. Plaintiffs answered the 

counterclaims of Fly High and Pomortsev on July 6, 2015. ECF Nos. 60–61.

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On May 12, 2015, the Court granted Game Garden’s motion to disqualify Plaintiff’s 

counsel, Gallagher. ECF No. 45. The Court determined that Gallagher had previously represented 

Game Garden and that Gallagher’s prior representation of Game Garden bore a substantial 

relationship to Gallagher’s representation of Plaintiffs in the instant action. Id. at 9. The Court 

relied in part on an April 5, 2013 letter sent from Gallagher to Plaintiffs, Pomortsev, and 

Bakanovich concerning “threats to the company’s intellectual property interests.” The Court 

concluded that the letter was sent in the course of Gallagher’s representation of Game Garden and

referred to the app later published as Cat Story, the subject of the instant litigation. Id. at 10–11. 

The Court also concluded that Gallagher represented Game Garden in the sale of Plaintiffs’ 

interests in Game Garden, which is the subject of Plaintiffs’ breach of contract claim against

Pomortsev. The Court gave Plaintiffs twenty-one days to find replacement counsel. Id. at 13. 

Plaintiffs’ new counsel, Jessica Taran, filed a notice of appearance on June 1, 2015. ECF No. 47. 

In the interim, the parties agreed that the Court should proceed to rule on a motion to 

dismiss filed by Distributor Defendants before Gallagher’s disqualification. ECF No. 42 at 10. 

On May 20, 2015, the Court granted Distributor Defendants’ motion to dismiss Plaintiffs’ third, 

fourth, and seventh causes of action. ECF No. 46. Distributor Defendants did not move to 

dismiss the other causes of action. See ECF No. 16. The Court dismissed Plaintiffs’ claims for 

contributory and vicarious copyright infringement against Distributor Defendants (third and fourth 

causes of action) because Plaintiffs failed to plead facts to support either claim. ECF No. 46 at 7–

9. However, the Court granted leave to amend because “amendment would not necessarily be 

futile.” Id. The Court also dismissed with prejudice Plaintiffs’ UCL claim against Distributor 

Defendants (seventh cause of action) because the claim was preempted by the Copyright Act. Id.

at 9–10. 

On July 1, 2015, Plaintiffs filed the FAC. ECF No. 58. Plaintiffs reasserted their first six 

causes of action: direct, contributory, and vicarious copyright infringement against Distributor 

Defendants; fraud and breach of contract against Pomortsev; and declaration of copyright 

ownership against Fly High. Id. ¶¶ 66–133. Plaintiffs also added Fly High as a defendant to the 

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contributory and vicarious infringement claims. Id. ¶¶ 101–119.

On November 11, 2015, the Court dismissed the FAC in its entirety. ECF No. 83. First, 

the Court dismissed Plaintiffs’ direct, contributory, and vicarious copyright infringement claims

against Distributor Defendants and Fly High. The Court noted that copyright registration is a 

“precondition” to a copyright infringement suit, and that registration requires copyright applicants 

to deposit two bona fide copies of the work to be registered with the Copyright Office. Id. at 8. In 

the FAC, Plaintiffs admitted that the deposit for the PussyVille and Cat Story registrations 

included the source code for a different game, Fairy Farm, and images of Cat Story taken after the 

game was published. Id. The Court concluded that these works were not bona fide copies of 

PussyVille or Cat Story. Specifically, the Court found that the deposited works were not “virtually 

identical” to the original PussyVille or Cat Story, nor were the deposited works “produced by 

directly referring to the original.” Id. at 9–10. Accordingly, the Court dismissed Plaintiffs’ 

copyright claims without prejudice to Plaintiffs bringing suit after properly registering PussyVille 

or Cat Story. Id. at 13. The Court’s decision was guided by two Ninth Circuit cases interpreting 

the Copyright Act’s registration requirements: Kodadek v. MTV Networks, Inc., 152 F.3d 1209 

(9th Cir. 1998), and Seiler v. Lucasfilm, Ltd., 808 F.2d 1316 (9th Cir. 1986).

Second, the Court declined to exercise jurisdiction over Plaintiffs’ remaining claims: fraud, 

breach of contract, and declaration of ownership. Defendants argued that each of these claims 

arose under Russian law while Plaintiffs contended that California law applied to the fraud claim

and potentially the declaration of ownership claim. Id. at 13–14. The Court did not resolve the 

choice of law issue, but noted that dismissal would allow California or Russian courts to interpret 

local law questions. Id. at 15. The Court also determined that judicial economy, convenience, and 

fairness weighed in favor of dismissal, and thus dismissed Plaintiffs’ fraud, breach of contract, and 

declaration of ownership claims without prejudice. Id. 

On December 2, 2015, the parties stipulated to dismiss Fly High’s and Pomortsev’s 

counterclaims without prejudice. ECF No. 86. On December 4, 2015, Defendants filed the instant 

motion for attorney’s fees and costs. ECF No. 87 (“Mot.”). Plaintiffs opposed the instant motion 

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on January 8, 2016. ECF No. 90 (“Opp.”). Defendants replied on January 22, 2016. ECF No. 93. 

II. LEGAL STANDARD

The Copyright Act permits a court to award full costs and reasonable attorney’s fees to a 

prevailing party. 17 U.S.C. § 505. “Prevailing plaintiffs and prevailing defendants are to be 

treated alike, [and] attorney’s fees are to be awarded to prevailing parties only as a matter of the 

court’s discretion” and in an evenhanded fashion. Fogerty v. Fantasy, Inc., 510 U.S. 517, 534

(1994). To guide the exercise of the court’s discretion, the court should consider five nonexclusive “Fogerty factors”: “(1) the degree of success obtained; (2) frivolousness; (3) motivation; 

(4) the objective unreasonableness of the losing party’s factual and legal arguments; and (5) the 

need, in particular circumstances, to advance considerations of compensation and deterrence.” 

Seltzer v. Green Day, Inc., 725 F.3d 1170, 1180–81 (9th Cir. 2013) (citing Fogerty, 510 U.S. at 

534 n.19). Further, the court must consider whether an award “will further the purposes” of the 

Copyright Act. SOFA Entm’t, Inc. v. Dodger Prods., Inc., 709 F.3d 1273, 1280 (9th Cir. 2013). 

“The primary objective of the Copyright Act is to encourage the production of original literary, 

artistic, and musical expression for the good of the public.” Fogerty, 510 U.S. at 524. 

To determine the amount of attorney’s fees to award, courts within the Ninth Circuit have 

employed the lodestar method. See, e.g., Jackson v. Sturkie, 255 F. Supp. 2d 1096, 1104 (N.D.

Cal. 2003). “When it sets a fee, the district court must first determine the presumptive lodestar 

figure by multiplying the number of hours reasonably expended on the litigation by the reasonable 

hourly rate.” Intel Corp. v. Terabyte Int’l, Inc., 6 F.3d 614, 622 (9th Cir. 1993). The party 

seeking fees bears the burden of demonstrating that the rates requested are “in line with those 

prevailing in the community for similar services.” Id. Generally, “the relevant community is the 

forum in which the district court sits.” Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th 

Cir. 2008). “Although in most cases, the lodestar figure is presumptively a reasonable fee award, 

the district court may, if circumstances warrant, adjust the lodestar to account for other factors 

which are not subsumed within it.” Ferland v. Conrad Credit Corp., 244 F.3d 1145, 1149 n. 4 

(9th Cir. 2001). 

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III.DISCUSSION

Defendants seek a total of $210,310.66 in attorney’s fees and costs. Specifically, Game 

Garden seeks $3,064.16 in costs and $122,850 in attorney’s fees, which includes fees that Game 

Garden paid on behalf of Pomortsev and Fly High. Game Insight seeks $84,396.50 in attorney’s 

fees. 

Plaintiffs do not dispute that Defendants are “prevailing parties” for purposes of the 

Copyright Act. Opp. at 3. However, Plaintiffs ask the Court to exercise discretion to decline to 

award fees. To determine whether to award fees, the Court considers the five Fogerty factors and 

whether an attorney’s fees award will further the purposes of the Copyright Act.

1. Degree of Success Obtained

The Court finds the first factor, degree of success obtained, to be neutral. Although the 

Court dismissed Plaintiffs’ copyright claims against Defendants, Defendants prevailed on a 

technical defense rather than on the merits, and the dismissal was without prejudice. The Ninth 

Circuit has held that success on a technical defense, such as the failure to satisfy the copyright 

registration requirements as was the case here, does not support an award of fees like a successful 

defense on the merits. Fantasy, Inc. v. Fogerty (“Fogerty II”), 94 F.3d 553, 556, 560 (9th Cir. 

1996). 

In the instant case, Plaintiffs pursued three claims of copyright infringement against 

Distributor Defendants and Fly High. See FAC. The Court dismissed all three claims because 

Plaintiffs did not deposit bona fide copies of PussyVille or Cat Story with the copyright 

applications, and thus did not properly register PussyVille or Cat Story. See ECF No. 83. The 

Court notes that, during the instant litigation, Plaintiffs requested that Microsoft, Amazon, and 

Apple cease distributing Cat Story. ECF No. 87-1, Decl. of Jeffrey T. Norberg ¶ 8. After the 

Court’s ruling, Defendants were able to republish Cat Story in the Windows Phone Marketplace. 

ECF No. 93-1, Reply Decl. of Jeffrey T. Norberg Ex. 1. Accordingly, the Court recognizes that 

Defendants were successful in defending against Plaintiffs’ claims. 

However, the Ninth Circuit has stated that success on a technical defense—including the 

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very defense asserted here, copyright registration requirements—does not support an award of fees

like a successful defense on the merits. Fogerty II, 94 F.3d at 556, 560. In Fogerty II, the Ninth 

Circuit affirmed the district court’s grant of attorney’s fees based, in part, on the district court’s 

reasoning that the “defense was the type of defense that furthers the purposes underlying the 

Copyright Act and therefore should be encouraged through a fee award” because the defendant 

“prevailed on the merits rather than on a technical defense, such as the statute of limitations, 

laches, or the copyright registration requirements.” Id. at 556 (emphasis added). The Ninth 

Circuit also noted that attorney’s fees are not automatically awarded to every prevailing party 

because, in part, “copyright defendants do not always reach the merits, prevailing instead on 

technical defenses.” Id. at 560. In the instant case, Defendants prevailed on just such a technical 

defense, copyright registration requirements.

Moreover, the Court dismissed Plaintiffs’ claims without prejudice. While Plaintiffs may 

not reassert copyright infringement claims based on the registrations asserted in the instant case, 

Defendants remain subject to suit should Plaintiffs obtain new registrations with valid deposit 

copies of PussyVille and Cat Story. See Tavory v. NTP, Inc., 297 F. App’x 986, 990–91 (Fed. Cir. 

2008) (noting that “the district court’s holding that Tavory’s copyright registration is invalid 

would preclude him from ever asserting it against [the defendant]”); see also Minden Pictures, Inc. 

v. John Wiley & Sons, Inc., 2014 WL 1724478, at *6 (N.D. Cal. Apr. 29, 2014) (noting that the 

degree of success is mitigated because the defendant remained subject to suit). 

Lastly, although registration is a prerequisite to an infringement suit, registration is not a 

prerequisite to a valid copyright. Kodadek, 152 F.3d at 1211. The Court’s order dismissing 

Plaintiffs’ claims based on copyright registration requirements did not consider the merits of 

whether Plaintiffs held a valid copyright or whether Defendants infringed that copyright. See ECF 

No. 83. Additionally, Defendants did not challenge the validity of the registrations on the first 

motion to dismiss. Cf. Minden Pictures, Inc., 2014 WL 1724478, at *6 (“[T]he Court finds the 

degree of success is mitigated by the fact that no substantive ruling regarding the underlying 

question of infringement was made.”); Perlan Therapeutics, Inc. v. Nexbio, Inc., 2007 WL 

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935619, at *2 (S.D. Cal. Mar. 19, 2007) (“[W]hile Defendants succeeded in obtaining dismissal of 

the copyright claims, the ruling did not reach the merits and Plaintiffs were able to re-assert their 

claims in a new proceeding. Thus degree of success was small.”). Accordingly, because the Court 

dismissed Plaintiffs’ claims based on technical registration requirements and without prejudice, 

the Court finds that the degree of success obtained does not support an award of attorney’s fees.

2. Objective Unreasonableness

The Court turns to objective unreasonableness, which the Court finds weighs against an 

award of attorney’s fees. “A claim is objectively unreasonable where the party advancing it 

‘should have known from the outset that its chances of success in this case were slim to none.’” 

See Perfect 10, Inc. v. Giganews, Inc., 2015 WL 1746484, at *11 (C.D. Cal. Mar. 24, 2015)

(quoting SOFA Entm’t, Inc., 709 F.3d at 1280). Similarly, “[a] claim that is not ‘objectively 

unreasonable’ at the outset can become so if the litigant continues to pursue it when the litigant 

knew or should have known that the chance of success was slim to none.” Frost-Tsuji Architects 

v. Highway Inn, Inc., 2015 WL 5601853, at *5 (D. Haw. Sept. 23, 2015). The “mere fact that [a 

party] lost cannot establish his objective unreasonability.” Seltzer, 725 F.3d at 1181.

As discussed above, the Court dismissed Plaintiffs’ copyright infringement claims because 

a valid copyright registration is a “precondition” to a copyright infringement suit, and Plaintiffs 

did not properly register PussyVille or Cat Story. ECF No. 83 at 7–10. In the Court’s order, the 

Court relied on two Ninth Circuit cases: Kodadek v. MTV Networks, Inc., 152 F.3d 1209 (9th Cir. 

1998), and Seiler v. Lucasfilm, Ltd., 808 F.2d 1316 (1986). Both Kodadek and Seiler state that 

copyright registration deposits must be of bona fide copies of the original work, and cannot be 

“reconstructions” of the original work. Kodadek, 152 F.3d at 1211 (quoting Seiler, 808 F.2d at 

1322). Thus, a bona fide copy “must be virtually identical to the original and must have been 

produced by directly referring to the original.” Id. at 1212. As discussed in the Court’s order, 

Plaintiffs admitted in the FAC that they had no access to the original PussyVille or Cat Story, and 

that Plaintiffs deposited the source code for a different game and photographs taken after the 

publication of Cat Story. In light of Kodadek and Seiler, the Court concluded that these deposit 

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copies were not bona fide copies of PussyVille or Cat Story. ECF No. 83 at 10.

However, the Court can not find that Plaintiffs’ claims were objectively unreasonable. 

First, the Copyright Office did issue registrations for both PussyVille and Cat Story. FAC ¶¶ 63, 

65. Further, these registrations were apparently issued after Gallagher discussed the contents of 

the Cat Story deposits with an attorney from the Copyright Office. See ECF No. 92, Decl. of 

Jessica Taran (“Taran Decl.”), Ex A. Defendants offer no reason why Plaintiffs were

unreasonable in relying on the Copyright Office’s review process and registration of PussyVille

and Cat Story. The Court notes that there is no evidence before the Court that Plaintiffs 

knowingly misled the Copyright Office as to the deposit copies. Given the registrations, Plaintiffs 

could have believed that the Copyright Office found the deposit copies sufficient, or that any 

needed changes to the registrations would not impact the registrations’ validity. While the Court 

did not agree that the deposit copies satisfied the registration requirements, the Court can not say 

that Plaintiffs should have known “that [their] chances of success in this case were slim to none”

in light of the issued registrations. Giganews, Inc., 2015 WL 1746484, at *11. 

Additionally, Plaintiffs raised a number of counterarguments in opposition to Defendants’ 

motion to dismiss for lack of a valid registration, including that registered copyrights are presumed 

valid and that Plaintiffs should be permitted to revise the copyright registrations without the 

dismissal of the case. Although the Court did not find Plaintiffs’ counterarguments persuasive, the 

Court also did not find the counterarguments to be baseless or unreasonable. See Seltzer, 725 F.3d 

at 1181 (noting that the “mere fact that [a party] lost cannot establish his objective 

unreasonability”). Accordingly, objective unreasonableness weighs against an award of fees.

3. Frivolousness

The next factor, frivolousness, also weighs against an award of attorney’s fees. A claim is 

frivolous when it is “clearly baseless” and involves “fantastic or delusional scenarios.” Perfect 10, 

Inc. v. Visa Int’l Serv. Ass’n, 2005 WL 2007932, at *4 (N.D. Cal. Aug.12, 2005) (quoting Neitzke 

v. Williams, 490 U.S. 324, 327–28 (1989)). “A claim is not frivolous merely because it is 

unsuccessful.” Bisson-Dath v. Sony Computer Entm’t Am. Inc., 2012 WL 3025402, at *2 (N.D. 

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Cal. July 24, 2012). The standard for frivolousness appears to be “somewhat” higher than the 

standard for objective unreasonableness. See Giganews, Inc., 2015 WL 1746484, at *11. Thus, 

for the same reasons that the Court found Plaintiffs’ claims were not objectively unreasonable, the 

Court finds that Plaintiffs’ claims were not frivolous. 

4. Motivation 

“[T]he existence of bad faith or an improper motive in bringing or pursuing an action 

weighs in favor of an award of fees to a prevailing party.” Frost-Tsuji Architects, 2015 WL 

5601853, at *7. “A finding of bad faith can be based on actions that led to the lawsuit, as well as 

on the conduct of the litigation.” Id. Defendants contend that bad faith may be inferred because 

(1) Plaintiffs filed in the United States, although the majority of the parties are from Russia and 

the development of PussyVille and Cat Story occurred in Russia; and (2) Plaintiffs’ counsel had to 

be disqualified by the Court based on an obvious conflict of interest and Plaintiffs’ counsel 

misrepresented facts to the Court when opposing the motion for disqualification. Mot. at 10–11.

As to Defendants’ first argument, the Court has no basis to conclude that the instant case 

should have been brought in Russia. Defendants did not move to dismiss based on forum non

conveniens, a doctrine that permits the dismissal of a case when “a court abroad is the more 

appropriate and convenient forum for adjudicating the controversy.” Sinochem Int’l Co. v. 

Malaysia Int’l Shipping Corp., 549 U.S. 422, 425 (2007). Moreover, Game Garden is a California 

Corporation, and one of the Game Insight defendants has its principal place of business in 

California. FAC ¶¶ 6, 8–10. 

Additionally, Plaintiffs’ federal copyright infringement claims were not Plaintiffs’ only 

claims possibly involving United States’ law. In opposition to the second motion to dismiss, 

Plaintiffs asserted that California law—not Russian law—applied to at least the fraud claim and 

possibly the declaration of ownership claim. See ECF No. 72 at 14–15. In declining supplemental 

jurisdiction over Plaintiffs’ fraud, declaration of ownership, and breach of contract claims, the 

Court specifically declined to determine whether California or Russian law applied. See ECF No. 

83 at 15 (noting either California or Russian courts could interpret the non-federal questions in the 

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case). Accordingly, the Court can not infer that Plaintiffs’ decision to bring suit in California is 

evidence of bad faith. 

As to Defendants’ second point, Defendants claim that Gallagher was disqualified due to 

an “obvious” conflict of interest and that Gallagher misrepresented evidence in opposition to the 

motion for disqualification. Mot. at. 10–11. Specifically, Defendants focus on a letter sent from 

Gallagher to Game Garden’s four owners on April 5, 2013 concerning “threats to the company’s 

intellectual property interests.” In the motion for disqualification, Defendants argued that this 

letter referred to PussyVille, and thus the letter demonstrated that Gallagher had previously 

represented Game Garden with respect to issues present in the instant litigation. In opposition to 

the motion, Gallagher represented that the letter related to another game, Fairy Farm. ECF No. 26 

at 8–9. Gallagher also stated that “it was not until after the sale of [Plaintiffs’] interests in [Game 

Garden] that Gallagher even learn [sic] of PussyVille.” Id. at 10. According to Defendants, 

however, this statement is a lie. Defendants cite an email from Gallagher to Plaintiff Epikhin, 

dated April 2, 2013—before Plaintiffs’ sale of their interests in Game Garden—that discusses 

PussyVille and indicates Gallagher’s awareness of PussyVille. Mot. at 11.

The Court concludes that Gallagher’s disqualification is not sufficient to show bad faith or 

an improper purpose by Plaintiffs. First, although the Court disqualified Gallagher, the Court did 

not suggest that Plaintiffs’ arguments against disqualification were frivolous or in bad faith. See 

ECF No. 45. Second, Defendants do not show that Gallagher misrepresented the nature of the 

April 5, 2013 letter to the Court. In the Court’s order disqualifying Gallagher, the Court agreed 

with Defendants that the April 5, 2013 letter was sent in the course of Gallagher’s representation 

of Game Garden and referred to PussyVille, the subject of the instant litigation. Id. at 10–11. 

However, the Court specifically noted that the declarations of Gallagher and Plaintiff Redlikh did 

not dispute that the April 5, 2013 letter related to PussyVille. Id. at 11. 

It does appear that Gallagher may have misrepresented when she became aware of the 

game PussyVille, which the Court finds concerning. However, the Court finds that this one 

misstatement is insufficient to establish bad faith or improper purpose on the part of Plaintiffs. 

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See Bisson-Dath, 2012 WL 3025402, at *2 (noting conduct must be “egregious” to “rise to the 

level of bad faith”). Gallagher’s statement that Gallagher did not know of PussyVille until months 

after Gallagher wrote the April 5, 2013 letter did not impact the Court’s decision on the motion for 

disqualification. In fact, as noted above, the Court concluded that the April 5, 2013 letter did 

relate to PussyVille, and the Court disqualified Gallagher. See ECF No. 45. Defendants do not 

identify any other misrepresentations or bad conduct by Plaintiffs. Cf. Frost-Tsuji Architects, 

2015 WL 5601853, at *7 (finding bad faith when plaintiff continued to seek discovery after 

summary judgment was adjudicated and filed numerous complaints against defendant with state 

and county agencies, even after the agencies clearly indicated the complaints were meritless); 

Giganews, Inc., 2015 WL 1746484, at *9–10 (finding improper purpose when company only 

asserted copyrights as a tax right off, submitted inadequate takedown notices even after numerous 

admonitions, and had never taken any steps to avoid copyright piracy).

Further, in opposition to the instant motion, Plaintiff Epikhin submitted a declaration under 

penalty of perjury in which he states that Plaintiffs informed Gallagher that Plaintiffs had no 

access to the original PussyVille or Cat Story. ECF No. 91, Decl. of Evgeny Epikhin ¶ 7. 

According to Epikhin, Gallagher never informed Plaintiffs that original source material was 

required to register PussyVille and Cat Story and thus that Plaintiffs’ copyright applications were 

not viable. Id. ¶¶ 7, 9–11. Epikhin further declares that Plaintiffs experienced a breakdown in 

communication with Gallagher and that Gallagher refused to provide copies of the copyright 

applications to Plaintiffs. Id. ¶¶ 10, 12. Lastly, Epikhin notes that Plaintiffs are Russian nationals 

with no knowledge of United States or California law. Id. ¶ 6. Plaintiffs’ lack of familiarity with 

U.S. law and Gallagher’s failure to inform Plaintiffs of the registration requirements suggest that 

Plaintiffs did not act in bad faith by bringing suit based on the asserted registrations.

Moreover, Gallagher discussed issues with the Cat Story deposits with a Copyright Office 

attorney before the Copyright Office registered Cat Story. See Taran Decl. Gallagher’s 

communications with the Copyright Office and the Copyright Office’s subsequent registration of 

PussyVille and Cat Story undermine the suggestion of bad faith. The Court concludes that this 

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factor weighs against granting attorney’s fees. 

5. Deterrence and Compensation

The fifth factor, the need for deterrence and compensation, weigh against granting

attorney’s fees. Developers of creative works “cannot afford to have obstructions placed in their 

path by claims of infringement that lack a reasonable chance of success because all along the 

plaintiff could not establish standing or another necessary element of infringement.” Oskar Sys., 

LLC v. Club Speed, Inc., 2010 WL 4235812, at *2 (C.D. Cal. Oct. 20, 2010); see also Actuate 

Corp. v. Aon Corp., 2012 WL 3627595, at *1 (N.D. Cal. Aug. 21, 2012) (noting that a successful 

defense furthers the purpose of the Copyright Act “by protecting purported copyright holders from 

suits that are not tethered by sound facts or authorities”). However, “it is not the purpose of the 

Copyright Act to deter litigants from bringing potentially meritorious claims, even though those 

claims may be ultimately unsuccessful.” Minden Pictures, Inc., 2014 WL 1724478, at *8 (internal 

quotation marks omitted). 

In the instant case, Plaintiffs’ claims were not frivolous or objectively unreasonable, and 

Plaintiffs did not act in bad faith. Thus, the Court does not believe that Plaintiffs will attempt to 

re-assert copyright infringement claims based upon invalid copyright registrations. Accordingly, 

no specific deterrence of Plaintiffs is required. Additionally, plaintiffs acting in good faith and 

with potentially meritorious claims should not be deterred from seeking to protect their copyrights 

based on the fear of a large attorney’s fees award should the Court find the copyright registration 

to be insufficient. See id. (noting courts should not deter plaintiffs with potentially meritorious 

claims); Visa Int’l Serv. Ass’n, 2005 WL 2007932, at *5 (noting the Copyright Act aims to 

incentivize plaintiffs to protect their copyrights). 

Lastly, the need for compensation does not support an award of fees. “[D]efendants who 

seek to advance a variety of meritorious copyright defenses should be encouraged to litigate them 

to the same extent that plaintiffs are encouraged to litigate meritorious claims of infringement.” 

Fogerty, 510 U.S. at 527. An award of fees may provide such encouragement. See id. Here, 

however, such encouragement is unnecessary because Defendants had “ample incentive” to 

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vigorously defend Cat Story, which has been downloaded over one million times. Bisson-Dath, 

2012 WL 3025402, at *3 (finding that a fee award did not further the purpose of the Copyright Act 

when defendants had incentive to defend its multibillion dollar franchise, and fee award could 

have a chilling effect). 

6. Other Factors

Courts in this circuit also consider “whether the chilling effect of attorney’s fees may be 

too great or impose an inequitable burden on an impecunious plaintiff.” Ets-Hokin v. Skyy Spirits, 

Inc., 323 F.3d 763, 766 (9th Cir. 2003). Thus, the Court must consider whether, in light of the 

losing party’s financial condition, it would be inequitable to award attorney’s fees. Id. 

Plaintiffs assert that $200,000 in attorney’s fees, “compounded by the financial losses that 

they have already suffered at the hands of Pomortsev,” may render them insolvent. Opp. at 9. 

However, Plaintiffs do not put forward any evidence of their financial condition. Accordingly, 

this factor is neutral.

7. Balance of Factors and the Purposes of the Copyright Act

In sum, no factor favors the granting of fees. The degree of success obtained and 

Plaintiffs’ financial condition are neutral, while objective reasonableness, frivolousness, Plaintiffs’

motivation, and the need for compensation and deterrence weigh against an award of fees. 

Viewing these factors, the Court concludes that an award of fees does not further the purposes of 

the Copyright Act. 

“The primary objective of the Copyright Act is to encourage the production of original 

literary, artistic, and musical expression for the good of the public.” Fogerty, 510 U.S. at 524. 

The Copyright Act commonly accomplishes that purpose by incentivizing plaintiffs to protect 

their copyrights even though a successful defense may also promote that purpose. See Visa Int’l 

Serv. Ass’n, 2005 WL 2007932, at *5. The Ninth Circuit has affirmed that a defense on the merits 

furthers the purposes of the Copyright Act in a way that “a technical defense, such as. . . copyright 

registration requirements” does not. Fogerty II, 94 F.3d at 556, 560 (noting that prevailing parties 

are not automatically awarded attorney’s fees because, in part, “copyright defendants do not 

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always reach the merits, prevailing instead on technical defenses”).

As discussed above, Defendants prevailed on a technical defense, not on the merits of 

infringement. Indeed, Defendants prevailed on a defense—failure to satisfy copyright registration 

requirements—that the Ninth Circuit explicitly has stated is not one that necessarily furthers the 

purposes of the Copyright Act. See id. Such a defense does not create “breathing space within the 

confines of copyright” to create new works, such as the fair use defense. See SOFA Entm’t, Inc., 

709 F.3d at 1280. Nor do Defendants explain how invalidating Plaintiffs’ registrations on 

technical grounds serves to “encourage the production” of creative works. See Fogerty, 510 U.S. 

at 524. The Court notes that, while registration is a prerequisite to an infringement suit, 

registration is not a prerequisite to a valid copyright. Kodadek, 152 F.3d at 1211. The Court made 

no determination whether Plaintiffs have a valid copyright or whether Defendants infringed that 

copyright.

The Court concludes that it will not serve the purposes of the Copyright Act to deter 

plaintiffs who are acting neither unreasonably nor in bad faith from seeking to protect their 

copyrights based on fear of a large attorney’s fees award should the Court find the copyright 

registration to be insufficient. See Visa Int’l Serv. Ass’n, 2005 WL 2007932, at *5 (noting the 

Copyright Act aims to incentivize plaintiffs to protect their copyrights). Accordingly, the Court 

DENIES Defendants’ motion for attorney’s fees and costs.

IV. CONCLUSION

For the foregoing reasons, the Court DENIES Defendants’ motion for fees and costs. 

IT IS SO ORDERED.

Dated: March 31, 2016

______________________________________

LUCY H. KOH

United States District Judge

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