In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 05-2498

JCW INVESTMENTS, INC., d/b/a Tekky Toys,

Plaintiff-Appellee,

v.

NOVELTY, INC.,

Defendant-Appellant.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 02 C 4950—Robert W. Gettleman, Judge.

____________

ARGUED FEBRUARY 21, 2006—DECIDED MARCH 20, 2007

____________

Before MANION, WOOD, and EVANS, Circuit Judges.

WOOD, Circuit Judge. Meet Pull My Finger® Fred. He

is a white, middle-aged, overweight man with black hair

and a receding hairline, sitting in an armchair wearing

a white tank top and blue pants. Fred is a plush doll

and when one squeezes Fred’s extended finger on his

right hand, he farts. He also makes somewhat crude,

somewhat funny statements about the bodily noises he

emits, such as “Did somebody step on a duck?” or “Silent

but deadly.”

Fartman could be Fred’s twin. Fartman, also a plush

doll, is a white, middle-aged, overweight man with black

hair and a receding hairline, sitting in an armchair
2 No. 05-2498

wearing a white tank top and blue pants. Fartman (as his

name suggests) also farts when one squeezes his extended

finger; he too cracks jokes about the bodily function. Two

of Fartman’s seven jokes are the same as two of the 10

spoken by Fred. Needless to say, Tekky Toys, which

manufactures Fred, was not happy when Novelty, Inc.,

began producing Fartman, nor about Novelty’s production of a farting Santa doll sold under the name Pull-MyFinger Santa.

Tekky sued for copyright infringement, trademark

infringement, and unfair competition and eventually won

on all claims. The district court awarded $116,000 based

on lost profits resulting from the copyright infringement,

$125,000 in lost profits attributable to trademark infringement, and $50,000 in punitive damages based on state

unfair competition law. The district court then awarded

Tekky $575,099.82 in attorneys’ fees. On appeal, Novelty

offers a number of arguments for why it should not be

held liable for copyright infringement, argues that Illinois’s punitive damages remedy for unfair competition is

preempted by federal law, and contends that the attorneys’ fees awarded by the district court should have been

capped according to Tekky’s contingent-fee arrangement

with its attorneys. For the reasons set forth below, we

affirm.

I

Somewhat to our surprise, it turns out that there is a

niche market for farting dolls, and it is quite lucrative.

Tekky Toys, an Illinois corporation, designs and sells a

whole line of them. Fred was just the beginning. Fred’s

creators, Jamie Wirt and Geoff Bevington, began working

on Fred in 1997, and had a finished doll in 1999. They

applied for a copyright registration on Fred as a “plush toy

with sound,” and received a certificate of copyright on
No. 05-2498 3

February 5, 2001; later, they assigned the certificate to

Tekky. In the meantime, Tekky sent out its first Fred dolls

to distributors in 1999. By the time this case arose, in

addition to Fred, Tekky’s line of farting plush toys had

expanded to Pull My Finger® Frankie (Fred’s blonde,

motorcycle-riding cousin), Santa, Freddy Jr., Count

Fartula (purple, like the Count on Sesame Street), and Fat

Bastard (character licensed from New Line Cinema’s

“Austin Powers” movies), among others. By March 2004,

Tekky had sold more than 400,000 farting dolls.

Novelty, a privately held Indiana corporation, is owned

by Todd Green, its president. Green testified in his

deposition, “any time we’d create an item, okay, we try to

copy—or try to think of some relevant ideas.” Novelty

personnel go to trade shows and take pictures of other

companies’ products, seeking “ideas” for their own. In early

2001, Green visited the Hong Kong showroom of TL Toys,

a manufacturer of Tekky’s Fred doll, and he spotted Fred.

In his deposition, Green testified that he might have

photographed Fred since “[i]t wouldn’t be unusual for us

to photograph everything we see.” Green admits that his

idea for Fartman was based on Fred and that he described

his idea to Mary Burkhart, Novelty’s art director, who

prepared a drawing based on Green’s description. According to Burkhart, Green wanted “a plush doll that

would . . . fart and shake. . . . And make a sound . . . a

hillbilly-type guy, sitting in a chair that would fart and

be activated by actually pulling his finger.” Typically,

Novelty would assign the job of drawing a new product

to an artist, such as Burkhart, and the artist would

then take her drawing to Green for his approval. That

was the procedure it followed for Fartman. Novelty began to manufacture plush farting dolls around October 8,

2001; the first doll it released was the one it called PullMy-Finger Santa. Fartman hit the stores one month later,

on November 5, 2001.
4 No. 05-2498

Tekky first learned of Fartman in March 2002; three

months later it filed this suit. In September 2002, the

district court granted a preliminary injunction, halting

Novelty’s sales of Fartman and his smaller relative

Fartboy. After the parties filed cross-motions for partial

summary judgment, the district court granted Tekky’s

motion and found that Novelty had infringed Tekky’s

copyright when it copied Fred in order to create Fartman.

The case then went to trial on several issues: damages for

the copyright infringement, liability and damages for

trademark infringement, and related state law claims. The

jury found Novelty liable for trademark infringement for

using the phrase “Pull My Finger” to sell the farting Santa

dolls and found that Novelty’s conduct was willful and

wanton, justifying an award of punitive damages under

Illinois’s unfair competition law. The jury awarded

$116,000 in damages for the copyright infringement,

$125,000 for the trademark infringement, and $50,000 in

punitive damages under state unfair competition law. On

post-trial motions, the district court granted Tekky’s

request for prejudgment interest and ruled that Tekky was

entitled to “its full attorneys’ fees.” After the filing of

Tekky’s fee petition and prior to the filing of a notice of

appeal, the district court tolled the period for filing a

notice of appeal in this case, following the procedure

outlined in Federal Rule of Civil Procedure 58(c)(2) and

Federal Rule of Appellate Procedure 4(a)(4)(A)(iii). See

Wikol ex rel. Wikol v. Birmingham Public Schools Bd. of

Educ., 360 F.3d 604, 607-08 (6th Cir. 2004). The district

court also appointed a special master to deal with the

litigation over attorneys’ fees, and that special master

recommended awarding $596,399.82 to Tekky. Novelty

objected, and the district court ultimately awarded

$575,099.82. Following the award of attorneys’ fees,

Novelty filed a timely notice of appeal.
No. 05-2498 5

II

A

We begin with the district court’s finding that Novelty

violated Tekky’s copyright when it created Fartman. As

with any grant of summary judgment, partial or otherwise,

we review the district court’s decision de novo, viewing

the facts in the light most favorable to the nonmoving

party. See Valentine v. City of Chicago, 452 F.3d 670, 677

(7th Cir. 2006).

To establish copyright infringement, one must prove two

elements: “(1) ownership of a valid copyright, and (2)

copying of constituent elements of the work that are

original.” Feist Publications, Inc. v. Rural Telephone

Service Co., Inc., 499 U.S. 340, 361 (1991). What is required for copyright protection is “some minimal degree of

creativity,” or “the existence of . . . intellectual production,

of thought, and conception.” Id. at 362 (quoting Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 59-60

(1884)). Generally, copyright protection begins at the

moment of creation of “original works of authorship fixed

in any tangible medium of expression,” including “pictorial,

graphic, and sculptural” works and sound recordings. 17

U.S.C. § 102(a). A work is “fixed” in a tangible medium of

expression “when its embodiment in a copy . . . is sufficiently permanent or stable to permit it to be perceived,

reproduced, or otherwise communicated for a period of

more than transitory duration.” 17 U.S.C. § 101. See Toney

v. L’Oreal USA, Inc., 406 F.3d 905, 909 (7th Cir. 2005).

The owner of a copyright may obtain a certificate of

copyright, which is “prima facie evidence” of its validity. 17

U.S.C. § 410(c). See Wildlife Express Corp. v. Carol Wright

Sales, Inc., 18 F.3d 502, 507 (7th Cir. 1994). 

Once it is established that a party has a valid copyright,

whether registered or not, the next question is whether

another person has copied the protected work. Copying
6 No. 05-2498

may be proven by direct evidence, but that is often hard to

come by. In the alternative, copying may be inferred

“where the defendant had access to the copyrighted work

and the accused work is substantially similar to the

copyrighted work.” Susan Wakeen Doll Co., Inc. v. Ashton

Drake Galleries, 272 F.3d 441, 450 (7th Cir. 2001) (quoting

Atari, Inc. v. N. Am. Philips Consumer Elecs. Corp., 672

F.2d 607, 614 (7th Cir. 1982)). See also Ty, Inc. v. GMA

Accessories, Inc., 132 F.3d 1167, 1169-70 (7th Cir. 1997). It

is not essential to prove access, however. If the “two works

are so similar as to make it highly probable that the later

one is a copy of the earlier one, the issue of access need not

be addressed separately, since if the later work was a copy

its creator must have had access to the original.” Ty, Inc.,

132 F.3d at 1170. “The more a work is both like an already

copyrighted work and—for this is equally

important—unlike anything that is in the public domain,

the less likely it is to be an independent creation.” Id. at

1169 (emphasis in original). If the inference of copying is

drawn from proof of access and substantial similarity, it

can be rebutted if the alleged copier can show that she

instead “independently created” the allegedly infringing

work. Susan Wakeen Doll Co., 272 F.3d at 450. “A defendant independently created a work if it created its own

work without copying anything or if it copied something

other than the plaintiff’s copyrighted work.” Id. (citing 3

MELVILLE B. NIMMER & DAVID NIMMER, NIMMER ON

COPYRIGHT § 12.11[D], at 12-175 (2001)).

Novelty contends that the district court protected too

much of Tekky’s toy—not just the expression but the

idea or common elements known as scènes à faire, which

we defined in Atari as “incidents, characters or settings

which are as a practical matter indispensable or at least

standard, in the treatment of a given topic.” 672 F.2d at

616. Novelty also takes issue with the district court’s

finding that it had access to Fred, that Burkhart copied
No. 05-2498 7

rather than independently created Fartman, and that

Fred and Fartman were substantially similar. As we

explain below, we are unpersuaded. Tekky had a valid

copyright in Fred, Novelty (the company) indisputably did

have access to Fred, and the two dolls are so similar

that the inference of copying even without access is irresistible.

Novelty does not argue that Tekky lacks a valid copyright in Fred or that Fred is so lacking in creativity that

a copyright could not attach. Indeed, Fred is a far cry

from a noncreative compilation of facts such as the telephone book in Feist. Here, we have a creative doll and a

valid copyright registration. There is no doubt that there

is a valid copyright. How much creativity Fred reflects

and what ideas he embodies (as opposed to the way he

expresses those ideas) merely help us to decide whether

we can infer copying from substantial similarity.

It is notable that Green, Novelty’s president, admits that

he saw and perhaps photographed Fred, and that Fred

gave him the idea for Fartman. While Burkhart denies

having seen Fred or even a picture of him, she drew the

model for Fartman at Green’s direction. Moreover, Fred

was already on the market in the United States at the

time Fartman was created. In Moore v. Columbia Pictures

Industries, Inc., 972 F.2d 939, 942 (8th Cir. 1992), the

Eighth Circuit found that a “reasonable possibility of

access can be established under the ‘corporate receipt

doctrine,’ ” under which: 

if the defendant is a corporation, the fact that one

employee of the corporation has possession of plaintiff’s work should warrant a finding that another

employee (who composed defendant’s work) had access

to plaintiff’s work, where by reason of the physical

propinquity between the employees the latter has the

opportunity to view the work in the possession of the

former.
8 No. 05-2498

Id. (quoting 3 NIMMER ON COPYRIGHT § 13.02[A]). In this

case, Novelty’s president saw Fred, directed that the

artist draw a figure that looks like Fred, and from that

drawing approved the manufacture of Fartman. On those

facts, the corporate receipt doctrine may just be icing on

the cake; the fact that Green directed Burkhart as she

created the drawing, rather than taking pencil in hand

and sketching it himself, is immaterial. Novelty plainly

had access to Fred and used that access in the manufacture of Fartman.

Even if access existed, Tekky had to show substantial

similarity between the two items in order to support an

inference of copying. The test for substantial similarity

is an objective one. See Incredible Technologies, Inc. v.

Virtual Technologies, Inc., 400 F.3d 1007, 1011 (7th Cir.

2005) (noting that we look at “whether the accused work

is so similar to the plaintiff’s work that an ordinary

reasonable person would conclude that the defendant

unlawfully appropriated the plaintiff’s protectable expression by taking material of substance and value”). We

look at the dolls themselves to determine substantial

similarity; to give the reader some idea of what the dispute

is about, we have attached as an Appendix to this opinion

a photograph from the record that depicts Fred, Fartman,

and Fartboy. The pictures show that the similarities

between Fred and Fartman go far beyond the fact that

both are plush dolls of middle-aged men sitting in armchairs that fart and tell jokes. Both have crooked smiles

that show their teeth, balding heads with a fringe of

black hair, a rather large protruding nose, blue pants that

are identical colors, and white tank tops. On the other

hand, Fartman has his name emblazoned in red across his

chest, his shoes are a different color from Fred’s, as is his

chair, and Fartman wears a hat. In the end, despite the

small cosmetic differences, the two dolls give off more than

a similar air. The problem is not that both Fred and
No. 05-2498 9

Fartman have black hair or white tank tops or any other

single detail; the problem is that the execution and

combination of features on both dolls would lead an

objective observer to think they were the same. See Mattel,

Inc. v. Goldberger Doll Mfg. Co., 365 F.3d 133, 136-37 (2d

Cir. 2004). We conclude that no objective person would find

these dolls to be more than minimally distinguishable. To

the contrary, they are substantially similar. That, in

combination with Green’s access, compels an inference of

copying. Indeed, the dolls are so similar that an inference

of copying could be drawn even without the evidence of

access. See Bucklew v. Hawkins, Ash, Baptie & Co., LLP,

329 F.3d 923, 926 (7th Cir. 2003).

Novelty contends that rather than copy, it merely made

a similar doll based on the same comic archetype, that of

“a typical man wearing jeans and a T-shirt in a chair doing

the ‘pull my finger’ joke.” That, Novelty argues, is the

idea, not the expression, and the reason that the two

dolls are similar is they are both based on that idea. The

district court found that Novelty tried to shoehorn too

much into the “idea” and that the only idea here is that of

a “plush doll that makes a farting sound and articulates

jokes when its finger is activated.” As the district court

put it:

Fred—a smiling, black-haired balding Caucasian male,

wearing a white tank top and blue pants, reclining

in a green armchair, who makes a farting sound,

vibrates and utters phrases such as “Did somebody

step on a duck?” and “Silent but deadly” after the

protruding finger on his right hand is pinched—is

plaintiff’s expression of that idea.

It is, of course, a fundamental tenet of copyright law that

the idea is not protected, but the original expression of the

idea is. See Feist, 499 U.S. at 348-49. Although it is not

always easy to distinguish idea from expression, by the

same token the task is not always hard. Novelty urges
10 No. 05-2498

that the similarity of the two dolls reflects the fact that

Fred himself is only minimally creative, representing a

combination of elements that were in the public domain or

were scènes à faire. The problem with this argument is

that the very combination of these elements as well as the

expression that is Fred himself are creative.

Novelty wants us to take the entity that is Fred, subtract

each element that it contends is common, and then consider whether Novelty copied whatever leftover components are creative. But this ignores the fact that the

details—such as the appearance of Fred’s face or even his

chair—represent creative expression. It is not the idea

of a farting, crude man that is protected, but this particular embodiment of that concept. Novelty could have created

another plush doll of a middle-aged farting man that would

seem nothing like Fred. He could, for example, have a

blond mullet and wear flannel, have a nose that is drawn

on rather than protruding substantially from the rest of

the head, be standing rather than ensconced in an armchair, and be wearing shorts rather than blue pants. To

see how easy this would be, one need look no further than

Tekky’s Frankie doll, which is also a plush doll, but differs

in numerous details: he is not sitting, and he has blond

hair, a tattoo, and a red-and-white striped tank. Frankie

is not a copy of Fred. Fartman is. We have no trouble

concluding that the district court properly granted partial

summary judgment to Tekky on the issue of liability for

copyright infringement.

B

The jury found Novelty liable for trademark infringement because Novelty used the words “Pull My Finger” to

sell its farting Santa dolls, and this use infringed Novelty’s

mark for those words as related to plush dolls. The jury

found that action to be willful, justifying the award of
No. 05-2498 11

$50,000 in punitive damages under Illinois common law.

On appeal, Novelty contends that the Lanham Act preempts the state law provision permitting punitive damages, although it admits that such a holding would be “an

extension of the law.”

Whether federal law preempts state law is a question

we review de novo. See Toney, 406 F.3d at 907-08. In 1992,

this court in Zazú Designs v. L’Oréal, S.A., 979 F.2d 499

(7th Cir. 1992), expressed concern about the award of

punitive damages in a trademark suit: 

Punitive damages are problematic because the

Lanham Act, although providing for the trebling of

compensatory damages, forbids other penalties. The

district court found a punitive award authorized by

the laws of Illinois without explaining where one

finds such authorization. The parties have been of no

greater assistance. Because some old cases say that

Illinois law supports punitive damages in trademark

cases, and L’Oréal has not asked us to revisit the

subject, we press forward.

Id. at 507 (internal citations omitted). In Zelinski v.

Columbia 300, Inc., 335 F.3d 633, 641 (7th Cir. 2003), we

assumed that punitive damages were available under

Illinois law but found that the defendant there had not

acted willfully so as to merit them. The magistrate judge

in this case noted that this remained an “issue of first

impression” because “[o]ther courts have upheld awards of

punitive damages for unfair competition when a compensatory award was also given under the Lanham Act, but

none of the courts discussed whether punitive damages

should be available.”

Federal law preempts state law in three situations: (1)

when the federal statute explicitly provides for preemption; (2) when Congress intended to occupy the field
12 No. 05-2498

completely; and (3) “where state law stands as an obstacle

to the accomplishment and execution of the full purposes

and objectives of Congress.” Sprietsma v. Mercury Marine,

537 U.S. 51, 64-65 (2002) (internal quotation marks and

citations omitted). In this case, only the third option is

applicable. The Lanham Act provides:

When a violation of any right of the registrant of a

mark registered in the Patent and Trademark Office,

a violation under section 1125(a) or (d) of this title, or

a willful violation under section 1125(c) of this title,

shall have been established in any civil action arising

under this chapter, the plaintiff shall be entitled,

subject to the provisions of sections 1111 and 1114 of

this title, and subject to the principles of equity, to

recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.

The court shall assess such profits and damages or

cause the same to be assessed under its direction. In

assessing profits the plaintiff shall be required to

prove defendant’s sales only; defendant must prove

all elements of cost or deduction claimed. In assessing

damages the court may enter judgment, according to

the circumstances of the case, for any sum above the

amount found as actual damages, not exceeding three

times such amount. If the court shall find that the

amount of the recovery based on profits is either

inadequate or excessive the court may in its discretion

enter judgment for such sum as the court shall find

to be just, according to the circumstances of the case.

Such sum in either of the above circumstances shall

constitute compensation and not a penalty.

15 U.S.C. § 1117(a) (emphasis added). One could imagine

characterizing the punitive damages permitted by state

law as a means of reaching a “just sum,” but we are not

willing to strain the language this far. In reality punitive

damages are intended to be a penalty. Thus federal law
No. 05-2498 13

permits compensation, or a just sum, and not a penalty

such as punitive damages. But it also does not expressly

forbid punitive damages in a way that would preempt the

state law remedy, and it is not clear from this passage that

punitive damages would stand “as an obstacle to the

accomplishment and execution of the full purposes and

objectives of Congress.” Indeed, punitive damages might

be another useful tool in reaching those objectives. Compare California v. ARC America Corp., 490 U.S. 93, 105

(1989) (holding that state antitrust suits on behalf of

indirect purchasers are not preempted despite greatly

increased exposure to damages, and commenting that

“[o]rdinarily, state causes of action are not pre-empted

solely because they impose liability over and above that

authorized by federal law”).

A leading treatise on trademark law, McCarthy on

Trademarks, assumes that such damages are permitted:

“While Lanham Act § 35 does not authorize an additional

award of punitive damages for willful infringement of a

registered trademark or for a violation of § 43(a), punitive

damages are still available for accompanying state,

non-federal causes of action for trademark infringement.”

J. THOMAS MCCARTHY, 5 MCCARTHY ON TRADEMARKS

AND UNFAIR COMPETITION § 30:97 (4th ed. 2005).

The First Circuit recently analyzed preemption of state

law remedies by the Lanham Act in Attrezzi, LLC v.

Maytag Corp., 436 F.3d 32 (1st Cir. 2006). In that case, the

remedies at issue were attorneys’ fees and double damages. Under the Lanham Act, attorneys’ fees are awarded

only in “exceptional cases” and enhanced damages are

awarded “subject to principles of equity.” 15 U.S.C.

§ 1117(a). In contrast, New Hampshire law awards attorneys’ fees automatically and “offers enhanced damages

automatically upon a showing that the violation was

willful or knowing.” 436 F.3d at 40-41. The First Circuit

described the question as “whether New Hampshire’s
14 No. 05-2498

laxer standard for an award of attorneys’ fees or its

mandatory award of enhanced damages undermines the

policy of the federal statute.” Id. at 41. The court acknowledged that the state law “does create a stronger incentive

for plaintiffs to bring unfair competition suits against

trademark infringers,” and that Congress intentionally

used a “less favorable incentive structure for federal suits.”

Id. Nonetheless, the court pointed out, “Congress did not

prohibit state unfair competition statutes that might

have substantive terms somewhat more favorable to

plaintiffs than the Lanham Act.” Id. at 42 (emphasis

in original). In the case before it, New Hampshire’s law

was substantively the same as the federal law, but the

remedial structure was more generous. The court was

unpersuaded that Congress meant to permit the former

and forbid the latter: “to complain in this case about the

modest deviation in remedial benefits favorable to plaintiffs is to swallow the camel but strain at the gnat.” Id.

Contrasting the Lanham Act, which “primarily provides

a federal forum for what is in substance a traditional

common-law claim,” with other more complete federal

regulatory regimes, it concluded that the state law remedies survive. See also Tonka Corp. v. Tonk-A-Phone, Inc.,

805 F.2d 793 (8th Cir. 1986) (per curiam) (holding the

same for a conflicting attorneys’ fees provision).

Punitive damages are not the same as attorneys’ fees,

but we find the logic reflected in Attrezzi equally applicable

here. Even the portion of the Lanham Act indicating

that the compensation under federal law shall not constitute a “penalty” does not, either expressly or by necessary

implication, mean that state laws permitting punitive

damages under defined conditions are preempted. We

agree with the First Circuit that, to the extent that state

substantive law survives and is coterminous with federal

law in this area, state law remedies should survive as well.

In the area of trademark law, preemption is the excep-
No. 05-2498 15

tion rather than the rule. For example, when Congress

amended the federal trademark laws to deal with

cybersquatting, it left the state law regimes (including

damages rules) in place. See Sporty’s Farm L.L.C. v.

Sportsman’s Market, Inc., 202 F.3d 489, 500-01 (2d Cir.

2000) (citing a legislative report indicating that the

law was not designed to preempt state law remedies). In

light of the fact that the Lanham Act has not been interpreted as a statute with broad preemptive reach, we

conclude that Congress would have acted more clearly if

it had intended to displace state punitive damage remedies. Aside from preemption, there is no other reason to

refrain from affirming the jury’s award of punitive damages in this case.

C

Lastly, Novelty contends the attorneys’ fees that the

district court awarded, $575,099.82, were too high. The

Copyright Act permits a district court to award attorneys’

fees “in its discretion.” 17 U.S.C. § 505. Similarly, “[a]

decision to award attorneys’ fees under the Lanham Act

is firmly committed to the district court’s discretion.”

BASF Corp. v. Old World Trading Co., Inc., 41 F.3d 1081,

1099 (7th Cir. 1994). This court reviews attorneys’ fees

decisions for abuse of discretion.

In this case, Tekky entered into a contingent-fee agreement with its attorneys, the terms of which are not before us. Novelty assumes that the fee agreement contains

a standard clause under which two-thirds of the amount

recovered would go to Tekky and one-third to the attorneys. It argues in essence this agreement caps the amount

that Tekky’s attorneys may recover. In Novelty’s view, at

the high end, we should take the jury’s award of $291,000

as the two-thirds and add one more third on top of that, or

$145,000, making the total award $436,000. The district
16 No. 05-2498

court rejected the idea that it could award only contractual

fees to Tekky’s lawyers and opted instead to use the

traditional lodestar approach, under which it began with

the hours that Tekky’s attorneys worked, the tasks they

performed, and their hourly rates, to come up with a

preliminary total. Because the fee petition was hotly

disputed, the district court appointed a special master

to resolve these ancillary disputes. The master issued

a 54-page report recommending a total award of

$596,399.82. The court commented that “the case took on

a life of its own unnecessarily and litigiously,” observing

that Novelty unnecessarily increased the fees sought by

“contesting practically every issue.” In addition, the

court noted, “without proof that plaintiff’s attorneys

fabricated time records or padded them in an inappropriate matter, there is simply no reason to reduce the

fees generated by time that was so obviously well-spent

from plaintiff’s perspective.” The special master did reduce

several items from Tekky Toys’ fee request, reductions

the district court found to be reasonable. The district

court also reduced the amount awarded for expenses

between the two fee petitions from $80,000 to $60,000 and

reduced the reimbursement for some foam boards.

Novelty’s argument for replacing the lodestar with the

fee agreement is based on City of Burlington v. Dague, 505

U.S. 557 (1992), in which the Court rejected a “contingency

enhancement” under fee-shifting statutes where the

prevailing party sought more than the lodestar as a reward

for the risk of obtaining nothing had the party not prevailed. The Court found that awarding more than the

lodestar was not permitted under two environmental laws

and more generally under federal statutes that permit the

“prevailing party” to collect fees: “The ‘lodestar’ figure has,

as its name suggests, become the guiding light of our

fee-shifting jurisprudence. We have established a ‘strong

presumption’ that the lodestar represents the ‘reasonable’

fee, and have placed upon the fee applicant who seeks
No. 05-2498 17

more than that the burden of showing that ‘such an

adjustment is necessary to the determination of a reasonable fee.’ ” Id. at 562 (internal citations omitted) (emphasis in original).

What Novelty fails to appreciate, however, is that the

Supreme Court held in Blanchard v. Bergeron, 489 U.S. 87

(1989), that an attorney’s fee allowed under 42 U.S.C.

§ 1988 is not limited to the amount provided in a

contingent-fee arrangement. The Court later held, in

Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994), that prevailing plaintiffs and prevailing defendants in copyright cases

must be treated alike, for purposes of fee awards; thus, the

rules articulated in Blanchard for computing fees for the

prevailing party apply with equal force to copyright cases.

Nothing in Dague, which dealt with an enhancement above

the lodestar, suggests a retreat from the holding in

Blanchard. In Blanchard, as here, the lodestar method

led to an award greater than the contingent-fee arrangement would have yielded. In Assessment Technologies of

WI, LLC v. WIREdata, Inc., 361 F.3d 434 (7th Cir. 2004),

although we commented that usually attorney’s fee

contracts are given “controlling weight” for purposes of

assigning value to a lawyer’s work, id. at 438, we recognized that contingent-fee contracts are different. In the

case of contingent-fee arrangements, “were it not for the

expectation of an additional, court-ordered award if the

suit was successful but yielded little in the way of damages, the plaintiff might not have been able to interest

a lawyer in taking the case in the first place. So the

percentage specified in the contract should not cap such

awards.” Id. at 439 (emphasis added).

That is enough to resolve the case before us. Although

the fees here were high—roughly double the damages—our

review of the special master’s report and the district court

decision reveals no abuse of discretion.

We AFFIRM the judgment of the district court.
18 No. 05-2498

APPENDIX
No. 05-2498 19

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—3-20-07