In a decision that opens the door wider for winning parties to seek awards of attorney's fees in copyright disputes, the U.S. Court of Appeals for the Ninth Circuit has ruled that a declaratory action alleging copyright abandonment sufficiently invokes the Copyright Act such that a court has discretion to award the prevailing party a reasonable attorney’s fee under Section 505, the fee-shifting provision of the Copyright Act.

While it will likely take years to assess the impact of this decision on copyright litigation, one thing is immediately clear: the Ninth Circuit has made the threshold decision of whether to pursue a declaratory judgment action more difficult now that parties know a future award of attorney’s fees could be waiting at the conclusion of an unsuccessful action.

The Underlying Facts

The court's 14-page decision in Doc’s Dream, LLC, v. Dolores Press, Inc., et al., handed down on May 13, 2020, centers on a copyright dispute relating to the video recordings of a deceased minister’s sermons. In 1983, the minister, Dr. Eugene Scott, launched a 24-hour-a-day religious television network, reaching audiences throughout North America.

In 1995, Dr. Scott licensed Dolores Press to distribute his works to the public, with profits going to his church. During this time, Dr. Scott made his works available for online viewing through websites bearing his name. When Dr. Scott died, he left all of his copyrights to his widow, Pastor Melissa Scott (no relation to the author of this alert) who continued the license agreement with Dolores.

In 2014, Patrick Robinson, a Georgia minister and sole owner of Doc’s Dream, requested permission to share Dr. Scott’s works with his students online. When Ms. Scott refused his request, Robinson launched a website sharing Dr. Scott’s works to “get the ball rolling in this legal battle.”

The District Court Decision

The parties filed four lawsuits in the U.S. District Court for the Central District of California. In three of the suits, Dolores alleged copyright infringement on the part of Doc’s Dream. In the fourth lawsuit, Doc’s Dream sought a declaration that Dr. Scott had abandoned the rights to his works before his death.

The District Court dismissed Dolores’ three copyright infringement lawsuits, but granted summary judgment in Dolores’ favor with respect to Doc’s Dream’s declaratory judgment action. As the prevailing party in the declaratory judgment action, Dolores sought an attorney’s fees award pursuant to Section 505, the Copyright Act’s fee-shifting provision.

The District Court held that attorney’s fees were not available to Dolores under Section 505, noting that the Ninth Circuit had not directly addressed whether attorney’s fees are available under the Copyright Act in declaratory relief actions. Relying on the authoritative treatise Nimmer on Copyright, the District Court concluded that attorney’s fees are available under the Copyright Act in declaratory relief actions only if the actions require construction of the Copyright Act.

The District Court identified the main issue in the case as whether Dr. Scott had abandoned his works. The District Court stated that copyright abandonment is a judicially created doctrine not based on any provision of the Copyright Act. The District Court further noted that Congress enacted the Copyright Act 25 years after the creation of the copyright abandonment doctrine and could have included the doctrine in the Copyright Act, but chose not to do so. Additionally, the District Court maintained that copyright abandonment requires the existence of certain elements not enumerated with the Copyright Act, notably the “intent to abandon ownership and some overt act manifesting this intent.”

For all of these reasons, the District Court held that its determination of the declaratory judgment action did not require construction of the Copyright Act and, therefore, Dolores had no right to recovery of its attorney’s fees.

The Ninth Circuit’s Decision

A three-judge panel of the Ninth Circuit, in a unanimous opinion authored by Judge Consuelo M. Callahan, reversed the District Court’s decision.

The Ninth Circuit began its analysis by recognizing that Section 505 expressly allows for the discretionary award of attorney’s fees in “any civil action under this title.” The District Court’s decision, it found, relied on a misreading of Nimmer, and noted that Doc’s Dream sued for a declaration that Dr. Scott’s works “fall[] outside the scope of copyright protection.” The Ninth Circuit reasoned that this request for declaratory relief fell within an example cited in Nimmer and required consideration of the Copyright Act.

The Ninth Circuit also rejected the District Court’s analysis that since the copyright abandonment doctrine preceded the enactment of the Copyright Act, an action alleging abandonment does not invoke the Copyright Act. Instead, the Ninth Circuit held that the District Court’s grant of summary judgment demonstrated that Doc’s Dream’s request for declaratory relief raised at least three aspects of the Copyright Act: (1) the issue of copyright attribution; (2) the transfer of copyright ownership, including licensing; and (3) the legal effect of copyright notices. Thus, the Ninth Circuit concluded that a declaratory relief action alleging copyright abandonment necessarily invokes sufficient “construction” of the Copyright Act to allow for a discretionary award of attorney’s fees under Section 505.

Finally, the Ninth Circuit rejected Doc’s Dream’s assertion that it brought its action not under the Copyright Act, but under the Declaratory Judgment Act. In so holding, the Ninth Circuit explained that the Declaratory Judgment Act and the Copyright Act “work in tandem,” and that the plain language of Doc Dream’s complaint specifically invoked the Copyright Act.

Ultimately, the Ninth Circuit includes two important holdings: 

• The fee-shifting provision of Section 505 applies to “any civil action under” the Copyright Act.
• Any action that "turns on the existence of a valid copyright and whether that copyright has been infringed" sufficiently invokes the Copyright Act as to allow for the discretionary award of attorneys’ fees.

The Ninth Circuit remanded the case to the District Court for consideration of whether an award of attorneys’ fees to Dolores is appropriate under the appellate court's previously identified factors for determining whether a case warrants a discretionary award of attorney’s fees.

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