Attorneys' Fees Not Awarded Where Inability To Show Damages Results In Dismissal

Iconbazaar, L.L.C. v. America Online, Inc. (M.D.N.C. May 24, 2006)

Defendant brought a request for attorneys’ fees pursuant to 17 U.S.C. § 505 after dismissal of the complaint via summary judgment. The court denied the request, since the dismissal resulted only from the plaintiff’s inability to show damages caused by the plaintiff’s alleged copying.

In exercising its discretion [when awarding attorneys’ fees pursuant to 17 U.S.C. § 505], a district court is to consider four factors: “(1) the motivation of the parties; (2) the objective reasonableness of the legal and factual positions advanced; (3) the need in particular circumstances to advance considerations of compensation and deterrence; and (4) any other relevant factor presented.”

In this case, these factors are not present. It is undisputed that AOL acted in good faith by removing [Izonbazaar’s allegedly copyrighted icon] in a reasonable amount of time. However, there is no evidence that Iconbazaar's acted in bad faith by subsequently bringing its copyright infringement suit for the initial alleged infringement. Additionally, although summary judgment was granted in favor of AOL, it was not done so on the basis that Iconbazaar's claims were frivolous. Here, summary judgment was not entered because Iconbazaar did not have a viable claim against AOL. Rather, the case was dismissed because Iconbazaar failed to provide evidence of actual damages, including any license fees it may be due or evidence of AOL's profits and revenues attributable the use of the dragonfly image. Finally, the assessment of attorneys' fees may be reasonable if it furthers the objectives of the Copyright Act by deterring a party from pursuing frivolous litigation. However, because Iconbazaar's case was dismissed for failure to show actual damages, not for its inability to show actual copying, such deterrence would not be served by an award of attorneys' fees.

Holding: "AOL's Motion to Award Statutory Attorneys' Fees and AOL's Supplement Motion for Attorneys' Fees are DENIED."