Ninth Circuit Affirms $3.9 Million Attorney's Fees Award in Ultraman Copyright Dispute

January 30, 2020 – Article

The Ninth Circuit recently affirmed a $3,938,227.22 attorney’s fees award in the contract and copyright dispute between UM Corporation (“UMC”) and Tsuburaya Products Co. (“TPC”) and other companies relating to the alleged wrongful creation of derivative works of the superhero Ultraman film series. UM Corp. v. Tsuburaya Prods. Co., 2019 U.S. App. LEXIS 36134, Case Nos. 18-55604, 18-56133 (9 Cir. Dec. 5, 2019).

The Ninth Circuit reviewed the district court’s award of attorney’s fees under the Copyright Act for an abuse of discretion. Id. *4. “’Reversal for abuse of discretion “is not appropriate unless this court has a definite and firm conviction that the court below committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors.’” Id. at *4-5 (citing Smith v. Jackson, 84 F.3d 1213, 1221 (9th Cir. 1996); Fantasy, Inc. v. Fogerty, 94 F.3d 553, 556 (9th Cir. 1996) (“A district court’s fee award does not constitute an abuse of discretion unless it is based on an inaccurate view of the law or a clearly erroneous finding of fact.”)).

The Ninth Circuit ruled that the district court properly analyzed the relevant factors for a fee award under the Copyright Act. Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n. 19, 114 S. Ct. 1023, 127 L. Ed. 2d 455 (1994); Historical Research v. Cabral, 80 F.3d 377, 379 n.1 (9th Cir. 1996). Those nonexclusive factors include, among other things, “’the degree of success obtained; frivolousness; motivation; objective unreasonableness (both in 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 (quoting Jackson v. Axton, 25 F.3d 884, 890 (9th Cir. 1994) and citing Fogerty, 114 S. Ct. at 1033 n. 19).

The Ninth Circuit specifically ruled that UMC’s objections to the district court’s treatment of the frivolousness and objective unreasonableness factors were not well taken. Specifically, on summary judgment, “there was no dispute that all previous courts to opine on the issue – Japanese, Chinese and Thai – had held that the 1976 agreement did not contain any transfer of rights to create new or derivative Ultraman works. UM Corp., supra, Slip op. at *5-6. Further, the district court’s independent interpretation of the contract under Japanese law resulted in the same conclusion. “[T]he court noted that the contested one-page document expressly lists the titles of nine Ultraman works and states that the ‘scope of license’ includes ‘Distributing Right,’ ‘Production Right,’ and ‘Reproduction Right.’ So nothing in its plain language suggests any claim to new or derivative works.” Id. at * 6. Accordingly, the Ninth Circuit found no “clear error of judgment.” Id

The Ninth Circuit also affirmed the district court’s award of attorney’s fees for the time period subsequent to summary judgment. Although TPC’s claim for fees for its copyright infringement counterclaim were barred by 17 U.S.C. § 412(2) because of the delay between publication and registration, both parties’ claims for declaratory judgment on their rights under the 1976 agreement proceeded to trial. Fees were properly awarded to TPC as the prevailing party for these causes of action. Id. at *6-7 (citing Entm’t Research Grp., Inc. v. Genesis Creative Grp., Inc., 122 F.3d 1211, 1230 (9th Cir. 1997); Twentieth Century Fox Film Corp. v. Entm’t Distrib., 429 F.3d 869, 884 (9th Cir. 2005), abrogated on other grounds by Rimini Street, Inc. v. Oracle USA, Inc., 139 S. Ct. 873, 203 L. Ed. 2d 180 (2019).

The Ninth Circuit affirmed the district court’s award of 1% of the attorney’s fees against each of Golden Media Group (“GMG”) and TIGA Entertainment Company, Ltd. (“TIGA”) because they were counterdefendants to TPC’s declaratory judgment counterclaim. UM Corp., supra, Slip op. at *7. GMG and TIGA are each responsible for paying 1% of the total attorney’s fees award or $39,382 each. Id.

The Ninth Circuit vacated the award to TPC of $567,118.13 for “full non-taxable costs” under 17 U.S.C. § 505 based on the U.S. Supreme Court’s recent ruling in Rimini Street, that the award of non-taxable costs is not permitted under the Copyright Act. Rimini Street, 139 S. Ct. at 876. In Rimini Street, “[t]he Supreme Court held that § 505’s authorization for the award of ‘full costs’    . . . covers only the six categories specified in the general costs statute, codified at [28 U.S.C.] §§ 1821 and 1920.”