Free Response in Opposition to Motion - District Court of Arizona - Arizona

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CHRISTOPHER D. LONN, ESQ. SBN 015166 HYMSON GOLDSTEIN & PANTILIAT, P.C. 2 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 3 Telephone: 480-991-9077 [email protected]
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Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

Attorneys for Plaintiffs IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA KENT A. DYER and SUSAN DYER, husband and wife, Plaintiffs, v. Case No. CV04-0408 PHX SMM PLAINTIFFS' RESPONSE IN OPPOSITION TO DEFENDANTS' MOTION FOR ATTORNEYS' FEES AND COSTS (Oral Argument Requested)

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JASON NAPIER and DANIELLE NAPIER, husband and wife; NAPIER SCULPTURE GALLERY, INC., a 13 Washington corporation,
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Defendants. Plaintiffs Kent Dyer and Susan Dyer ("Plaintiffs"), hereby submit their Memorandum of Points and Authorities in opposition to Defendants' Motion for Attorneys' Fees and Costs. Plaintiffs respectfully request this Court to exercise its equitable discretion and deny any award of attorneys' fees and costs to Defendants. I. INTRODUCTION The logic underlying Defendants' Motion for Attorneys' Fees and Costs ("Motion for Fees") is flawed. The Defendants' "winner-take-all" argument must be disregarded because such a position undermines the purposes and objectives of the Copyright Act. This Court should deny Defendants' Motion for Fees because: (i) This is a "close" case, (ii) This case presents novel legal issues and (iii) Defendants' fee application is unreasonable. A. Dyer v. Napier is a "close" Case.

Defendants' Motion for Fees improperly assumes that simply because summary judgment was awarded in their favor, that attorneys' fees and costs should be
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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

automatically imposed against Plaintiffs for the staggering amount of $135,303.43! Defendants' faulty logic is made concrete through the use of a local sports analogy. In 2001 the Arizona Diamondbacks played the New York Yankees in the World Series. After a hard fought seven game series, the Diamondbacks won the World Series 4 games to 3. The 2001 World Series was not decided until the bottom of the 9th inning in Game 7. Facing the Yankees' best relief pitcher, Mariano Rivera, Luis Gonzalez of the Diamondbacks managed to hit a bloop single just over the head of the Yankees' drawn-in infield to drive in the game winning run. The difference between Luis

Gonzalez's bloop single landing in the shallow portion of the outfield versus being caught by the shortstop at his normal depth is slight yet the effect of that bloop single is so great. Is it reasonable to say that the Yankees were not worthy opponents for the Diamondbacks in the World Series just because they lost a close final game in the bottom of the 9th inning? The emphatic answer to this question is "absolutely not"! Applying the Diamondbacks-Yankees World Series analogy to this case, the Defendants would have this Court believe that they should recover all of their attorney's fees and costs just because they won a hard fought and close contest on summary judgment. In the World Series, the winner does take all. Under Section 505, however, the Supreme Court has made it clear that winners do not automatically take all. B. This Case Presents Novel Legal Issues.

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The combination of a "close" case and a case presenting novel legal issues is the paradigm for this Court to exercise its equitable discretion for the purpose of denying Defendants' Motion for Fees. Governing case law demonstrates that attorneys' fees under Section 505 should not be awarded where novel and/or "close" legal issues exist because litigation of such issues clarifies the boundaries of copyright law. Under Defendants' flawed logic, a plaintiff who goes forward with a meritorious but "close" case will be "chilled" from prosecuting his or her copyright infringement claim because of the possibility that the "close" case is decided in the defendants favor. "Chilling" the rights of plaintiffs with meritorious copyright infringement claims does not find support 2
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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

in governing case law and does not support the purposes of the Copyright Act. Defendants' "winner-take-all" argument undermines the purposes behind the Copyright Act. C. Defendants Fee Application is Unreasonable.

Defendants' Motion for Fees at page 12 states that this is a "straight forward copyright infringement claim." Yet, Defendants seek the staggering sum of

$135,303.43 for attorney's fees and costs. In stark contrast, Plaintiff's attorney's fees and costs for the same period of time total $75,188.85. This drastic difference in total attorneys' fees and costs is examined more fully below. Plaintiffs will demonstrate through numerous examples that Defendants' counsel: overworked this case, performed duplicative work, failed to utilize associate attorneys at lower hourly rates, and failed to use paralegals in a cost-effective and efficient manner. The Factual Overview portion of this Memorandum also discusses Defendants' delay tactics from the inception of this case and into 2005. Defendants' delay tactics needlessly increased attorneys' fees. II. FACTUAL OVERVIEW In order to assess Defendants' Motion for Fees, the Courts attention is invited to the following subject matter: (i) commencement of the action/settlement/Defendants' "foot dragging," (ii) facts in the summary judgment record demonstrating that this is a "close" case, and (iii) an analysis of Defendants' fee application. Plaintiffs respectfully assert that these facts, in combination with the following legal analysis, will cause the Court to conclude that Defendants' Motion for Fees must be denied because any award is contrary to governing law and undermines the purposes of the Copyright Act. A. Commencement of Action, Settlement and Defendants' Delays

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For approximately one year after the case was filed, Defendants' dragged their feet and delayed these proceedings. Defendants' delay tactics scuttled settlement

discussions. The net result was the thorough litigation of the issues in this case. These concerns were brought to the Court's attention on February 9, 2005 through Plaintiff's Response in Opposition to Defendants' Motion for Extension of Time to Disclose 3
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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

Expert Opinions ("Plaintiffs' Response"). See Plaintiff's Response attached hereto as Exhibit "A". The following facts and circumstances illustrate Defendants' actions: 1. On February 26, 2004 Plaintiffs filed their Verified Complaint and

Application for Preliminary Injunction alleging one claim for copyright infringement. Shortly after the action was served on Defendants, discussions commenced concerning settlement of this lawsuit. 2. In March and April 2004 numerous discussions took place concerning the

prompt production of an accounting from Defendants so that Plaintiffs could ascertain the amount of Defendants' profits from the sale of the infringing sculptures. The

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accounting was not produced by Defendants until September 23, 2004. Settlement on the reasonable terms discussed was rejected by Defendants. See e-mail correspondence between counsel discussing a 50% split of the profits made by Defendants dated March 25, 2004 and March 31, 2004 and letter from Christopher D. Lonn to Laura Zeman dated April 29, 2004, attached hereto as Exhibit "B." 3. Upon stipulation of the parties, the Court signed the Preliminary Injunction

in this matter on April 19, 2004. Paragraph 2 of the Preliminary Injunction specifically required that "Defendants shall provide Plaintiff's counsel with a complete and full accounting of all such sales for the Existing Sculptures including, but not limited to: cost to create and cast each existing sculpture, freight costs, total sales price, total profit, and name, address and telephone number of each purchaser." In violation of the Preliminary Injunction, Defendants did not produce the "complete and full accounting" until September 23, 2004 ­ five months beyond the date of this Court's Order. Defendants produced the accounting only after receiving communications from undersigned counsel stating that judicial intervention would be sought if the accounting was not immediately produced. See Correspondence from Christopher D. Lonn to Laura Zeman dated

September 10, 2004 attached hereto as Exhibit "C". 4. On August 3, 2004 the parties appeared before this Court for a status

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hearing. Based on the language in Paragraph 2 of the Preliminary Injunction, the Court 4
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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

believed that settlement of this case was imminent. To the Court's dismay, settlement was not imminent because the Defendants had not followed through on their previously stated intention to settle the case before the first status hearing. Consequently, the Court scheduled a second status hearing for October 25, 2004, based on a representation of both counsel that mediation would occur in the interim. 5. Within 72 hours after the first status hearing, Plaintiff's counsel sent an e-

mail to Attorney Zeman listing three separate dates when Mr. and Mrs. Dyer would be available to travel to Phoenix and participate in a mediation. See e-mail correspondence from Christopher D. Lonn to Laura Zeman dated August 6, 2004, attached hereto as Exhibit "D". Defendants did not provide dates to Plaintiffs when they would be willing to attend a mediation. 6. On October 25, 2004, a second status hearing was attended by the parties

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in this case. To the Court's surprise, Attorney Zeman reported to the Court that the Defendants did not wish to mediate because they wanted to first pursue discovery. Notwithstanding this representation to the Court, Defendants did not submit their first written discovery request until March 11, 2005. B. 1. Critical Facts from the Summary Judgment Record making this Case "Close" A comparison of Mr. Dyer's photograph to Jason Napier's sculpture shows

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a striking similarity between Plaintiffs' copyrighted photograph and Defendants'
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sculpture. See Exhibit "E" attached hereto.
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2.
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It is undisputed that Jason Napier obtained the copyrighted photograph

directly from Mr. Dyer. Access to the copyrighted photograph is established. 3.
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Shortly after obtaining Mr. Dyer's photograph, Mr. Napier returned to his

studio in Washington and commenced work on the sculpture. 4.
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Evidence from Leslie Bell demonstrates that while at a foundry in Oregon,

she noticed a large bronze sculpture of a mountain lion with a cub in its mouth. Ms. Bell noticed an open drawer approximately 10 feet away from Mr. Napier's mountain lion
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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

sculpture. That open drawer contained a photograph of a mountain lion with a cub in its mouth. After viewing the photograph of the mountain lion with the cub in its mouth and comparing it to the sculpture, she determined that Mr. Napier had copied the photograph. Ms. Bell looked at the photograph in the frame and she saw that there was a pre-printed label on it that bore the name of Kent Dyer as the photographer. See Declaration of Leslie Bell attached hereto as Exhibit "F." 5. Mr. Dyer traveled from Colorado to Montana to scout locations to capture

the image of a mother mountain lion with a cub in its mouth against a dramatic mountain setting. 6. Mr. Dyer hired Animals of Montana, Inc. and used a trainer to assist in

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capturing the specific artistic expression he sought. 7. Substantial creative effort went into all aspects of obtaining the subject

photograph. See deposition testimony of Kent Dyer at pp.79-80 attached to Defendants' Memorandum in support of their Motion for Fees at Appendix "A." 8. During the photograph session, Mr. Dyer relied on his years of artistic

development in taking wildlife photographs. 9. Mr. Dyer went to great lengths to select the proper light, pose, camera

angle, shadowing and other factors to capture the image precisely as he envisioned it. 10. Mr. Dyer made numerous creative judgments concerning technical matters

with his camera, the use of light, etc. 11. Mr. Dyer took many photographs, from which the subject photograph was

eventually selected. 12. Defendants' expert witness, Jane Kinne, admitted the uniqueness of Kent

Dyer's artistic creation. When asked under oath if she had seen another photo exactly like Mr. Dyer's photograph she said "exactly like it, no, I can't claim to have seen another." See Deposition of Jane Kinne at pp. 74, 75, ll. 23-25 and ll. 3-4, attached hereto as Exhibit "G.". Jane Kinne further admitted that she has seen many photographs 6

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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

of mountain lions with a kitten in the mother's mouth, but she has not seen one like Mr. Dyer's. Id. at p. 75, ll. 3-13. 13. Deposition testimony of Plaintiffs' expert witness, Jeffrey Tritel, is in

accord with that of Jane Kinne insofar as he has also never seen another photograph like Kent Dyer's original artistic work. See deposition testimony of Jeffrey Tritel at p. 73, ll. 10-19, attached hereto as Exhibit "H." 14. The deposition testimony of Jane Kinne and Jeffrey Tritel demonstrates

that Mr. Dyer's photograph is a unique and original artistic expression. Because neither expert ­ including Jane Kinne who has 50 years of experience in the industry ­ has ever seen a mountain lion in a pose such as the one captured by Mr. Dyer, then it is erroneous to conclude that the pose captured in Mr. Dyer's photograph exists in nature. 15. The facts in this case represent a case of first impression in the Ninth

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Circuit. Unlike Rogers v. Koons, 960 F.2d 301 (2nd Cir. 1992), there is no similar photographer ­ sculptor infringement case in the Ninth Circuit. Indeed, there are

precious few published cases alleging copyright infringement by a sculptor based on the original work of a wildlife photographer. C. Analysis of Defendants' Fee Application

Upon receiving Defendants' Memorandum in Support of their Motion for Fees, undersigned counsel and his paralegal, Peggy Lough analyzed the 336.2 hours invested into this case by Attorney Zeman. A "nutshell" summary of undersigned counsel's findings are set forth below. Attached hereto as Exhibit "I" is undersigned counsel's Affidavit describing how this analysis was performed. Attached to counsel's Affidavit are five exhibits that serve to support the statistics referenced hereunder. Defendants have asserted that this is a "straight forward copyright infringement claim." Attorney Zeman's Affidavit in support of Defendants' Motion for Fees states that she has "been practicing intellectual property law at Snell & Wilmer since November 1996." See Affidavit of Laura J. Zeman attached to Defendants'

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Memorandum in Support of Its Motion for Fees at Exhibit 3, ¶5. Attorney Zeman notes 7
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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

her billing rate for the course of this case commenced at $340.00 per hour and increased to $375.00 per hour. Id. Undersigned counsel is not primarily an intellectual property lawyer. Undersigned counsel's billing rate during the course of this case was

predominantly $200.00 per hour. For approximately 60 hours Plaintiffs were billed at the rate of $250.00 per hour. Consider the following facts about Defendants' Fee Application: · Defendants seek attorneys' fees and costs in the amount of $135,303.43. The

Plaintiff's attorney's fees and costs for the same period of time total $75,188.85. difference is $60,114.58. · ·

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Defendants' use of paralegals totals a mere 3.7 hours. Plaintiffs' counsel

utilized paralegals in the prosecution of this case for a total of 16.7 hours. Despite Snell & Wilmer being the largest law firm in Arizona, and

considering its vast human resources, Attorney Zeman did not employ the services of lower hourly rate associate attorneys. · Attorney Zeman billed for legal research, assembling exhibits and filing

documents ­ all of which could have been done by a paralegal and/or an associate attorney working at a significantly lower hourly rate. · Total attorney hours spent by Attorney Zeman on this case equal 336.2

hours. Total attorney hours spent by Attorney Lonn on this case equal 277.7 hours. This is a difference of 58.5 hours. · Attorney Zeman spent 33.2 hours researching, drafting and litigating both

motions to strike filed by Plaintiffs. Attorney Lonn spent 22.0 hours researching, drafting and litigating both motions to strike filed by Plaintiff ­ including reply memoranda. · With regard to Defendants' First Motion for Summary Judgment

regarding statutory damages and attorney's fees, Attorney Zeman spent 31.5 hours researching and briefing that motion. In comparison, Attorney Lonn spent a total of 15.4 hours on that same task.
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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

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With respect to Defendants' second Motion for Summary Judgment

regarding liability, Attorney Zeman spent 102.0 hours research, writing and briefing that motion. Ms. Zeman's billing entries reveal duplicative legal research entries. In comparison, Attorney Lonn spent a total of 36.3 hours researching, writing and drafting Plaintiff's response to Defendants' second Motion for Summary Judgment. · With regard to drafting various written discovery requests and responses

to discovery requests, Attorney Zeman spent a total of 26.2 on this work. With regard to drafting various written discovery requests and responses to discovery requests, Attorney Lonn spent a total of 9.3 hours on this work. III. LEGAL ANALYSIS A. The Court has Equitable Discretion to Deny Attorneys Fees and Costs

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Plaintiffs acknowledge that under the Copyright Act, courts "may...award a reasonable attorneys' fee to the prevailing party as part of the costs." 17 U.S.C. §505. The award of attorneys' fees is committed to the court's equitable discretion. Historical Research v. Cabral, 80 F.3d 377, 379 (9th Cir. 1996). The United States Supreme Court in Fogerty v. Fantasy, Inc., 510 U.S. 517, 533-34, 114 S.Ct. 1023, 1033, 127 L.Ed.2d 455 (1994), opined that Section 505 did not "enact[] the British Rule for automatic recovery attorneys' fees by the prevailing party." The Fogerty Court expressly

recognized that the automatic awarding of attorneys' fees to the prevailing party would pretermit the exercise of the Court's equitable discretion when deciding to award attorneys' fees and costs to the prevailing party under the Copyright Act. Fogerty, 510 U.S. at 533, 114 S.Ct. at 1033. When considering an award of attorneys fees under Section 505, the District Court may consider the following factors: (1) frivolousness; (2) motivation; (3) objective unreasonableness both in the factual and legal components of the case; and (4) the need in particular circumstances to advance the dual goals of compensation and deterrence. Fogerty, 510 U.S. at 534 n. 19, 114 S.Ct. at 1023. 9

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B.

Attorneys' Fees should not be Awarded Where the Case is Novel or Close

Judge Scheindlin of the Southern District of New York opined that "the mere fact that a defendant obtains summary judgment does not necessarily mean that the plaintiff's position was frivolous or objectively unreasonable." Earth Flag, Ltd. v. Alamo Flag Co., 154 F.Supp.2d 663, 666 (SDNY 2001); see also CK Co. v. Burger King Corp., 1995 WL 29488 (S.D.N.Y.), 34 U.S.P.Q.2d 1319 (There is no per se entitlement to attorneys' fees whenever a defendant prevails on a summary judgment motion against a copyright plaintiff. This is true even where the Court concluded that there were no close similarities between protectable elements of the work); accord Brod v. General Publishing Group, Inc., 32 Fed. Appx. 231, 236, 2002 WL 460136 (9th Cir.) (photographer sued author for copyright infringement, defendant prevailed on summary judgment and the Ninth Circuit affirmed the District Court's denial of Section 505 fees to defendant); Waite v. Patch Products, Inc., 12 Fed. Appx. 330, 335-36, 2001 WL 700828 (6th Cir.) (Defendants were awarded summary judgment on copyright infringement claim and the Sixth Circuit affirmed the District Court's denial of attorneys' fees to the defendants).1 The Court should place particular emphasis on the objective unreasonableness factor because it "is firmly rooted in the admonission that an award of attorneys' fees must comport with the purposes of the Copyright Act." Earth Flag Ltd., 154 F.Supp.2d at 666. It is generally agreed that "a court should not award attorneys' fees where the case is novel or close because such a litigation clarifies the boundaries of copyright law." Id. (emphasis added) citing Lotus Dev. Corp. v. Borland Int.l, Inc., 140 F.3d 70, 75 (1st Cir. 1998) ("When close infringement cases are litigated, copyright law benefits from a result in clarification of the doctrines boundaries."); see also Fogerty, 510 U.S.

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The Brod and Waite cases are unpublished decisions of the Ninth and Sixth Circuit Courts of Appeal, respectively. Pursuant to Ninth Circuit Rule 36-3(b)(ii), these cases may be cited to this Court for the limited purpose of addressing Defendants' claim for attorneys' fees. Accordingly, the Brod and Waite cases are attached hereto as Appendix "A" and Appendix "B." For the Court's convenience, the opinion in CK Co. v. Burger King Corp., supra, is attached hereto as Appendix "C."

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at 527, 114 S.Ct. at 1030 ("Because copyright law ultimately serves the purposes of enriching the general public through access to creative works, it is peculiarly important that the boundaries of copyright law be demarcated as clearly as possible."). C. 1. Analysis Under the Fogerty Factors Objective Unreasonableness.

As discussed in Earth Flag Ltd., supra, the most critical factor for the Court to consider in awarding Section 505 attorneys' fees is objective unreasonableness. An award of attorneys' fees against a party with an objectively reasonable litigation position will not promote the purposes of the Copyright Act. Earth Flag, Ltd., 154 F.Supp.2d at 666. The holding in Earth Flag comports with the rationale set forth by the United States Supreme Court in Fogerty, supra. Moreover, awarding attorneys' fees against a copyright plaintiff in a case were the claim was objectively reasonable and presents novel or close factual and/or legal issues is discouraged and undermines the purposes of the Copyright Act. Id.; Lotus Dev. Corp. v. Borland Int.l, Inc., 140 F.3d at 75. In the case sub judice, undersigned counsel spent a considerable amount of time evaluating this case before the Complaint and Application for Preliminary Injunction were prepared and filed. Plaintiff's sole claim is for copyright infringement. Plaintiffs' claim has merit. The merit of Plaintiffs' claim is exemplified through Defendants' stipulation to the Preliminary Injunction sought by Plaintiff. Early on, the parties discussed settlement of this dispute through a 50/50 split of Defendants' profits. Further, Defendants made representations to this Court at two separate status hearings ­ that settlement discussions were ongoing and mediation would be scheduled. It is contrary to common sense and logic that the Defendants would stipulate to the issuance of a Preliminary Injunction if they felt that Plaintiff's claims lacked merit and/or were frivolous. Moreover, it makes little sense for

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Defendants to spend time discussing settlement and making representations to this Court about mediation if they truly felt that Plaintiffs' claim was not meritorious. 11
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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

Defendants did not aggressively defend this case from the outset because they knew Plaintiffs' claim was meritorious and they were concerned about liability under the Copyright Act. Governing case law holds that just because Defendants have prevailed on summary judgment does not mean that there is an automatic entitlement to attorneys' fees and costs. Section 505 does not encourage a "winner take all" approach to

attorneys' fees. Plaintiffs cited numerous cases above where the prevailing defendant in a copyright infringement action was denied attorneys' fees and costs even though defendant prevailed on summary judgment. The critical facts making this a "close" case are numerous. The Court's written Memorandum Decisions on both summary judgment motions were lengthy. The Court's level of analysis speaks volumes as to the

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challenges facing the Court in deciding those thoroughly litigated Motions. Plaintiffs' legal positions on those motions are reasonable even though the Court ruled in favor of Defendants. CK Co. v. Burger King Corp., supra. This also appears to be a case of first impression in the Ninth Circuit. It is undeniable that there is a striking similarity between Mr. Dyer's copyrighted photograph and the sculpture made by Defendant Jason Napier. It is undisputed that Mr. Napier obtained the photograph directly from Mr. Dyer. Witnesses testified that the sculpture is a "direct rip off" of the photograph. Moreover, Leslie Bell stated under oath that Mr. Dyer's photograph was found next to the clay mold being made by Mr. Napier at the foundry in Oregon. Lastly, and perhaps most critically, both expert witnesses agreed that they have never seen a photograph like the one created by Mr. Dyer! There is no evidence in the summary judgment record that any human being has ever seen a pose of a mother mountain lion with a cub in its mouth as depicted in the original and dramatic artistic expression created by Kent Dyer. These facts ­ plus the myriad of other facts in the summary judgment record ­ make this case objectively reasonable for litigation under the Copyright Act. It lacks credulity for Defendants to argue otherwise.
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2.

Frivolousness.

Many of the same facts and legal issues addressed directly above demonstrate that Plaintiff's claim for copyright infringement is not frivolous. Those facts will not be reiterated here. In the Ninth Circuit there is no case that is directly on point with the facts of this case. Plaintiffs have urged that this case is most on point with the Second Circuit's opinion in Rogers v. Koons, supra. Plaintiffs have filed their Notice of Appeal in this matter and these issues will be litigated to the Ninth Circuit. Plaintiffs are steadfast in their assertion that this case should be governed under the rationale set forth in Rogers v. Koons. Undersigned counsel is not aware of any published case in the Ninth Circuit that is factually on point with Rogers v. Koons. Thus, Plaintiffs' arguments to this Court in reliance on Rogers v. Koons are reasonable given the lack of similar Ninth Circuit case law. Simply because a defendant in a copyright infringement prevails on summary judgment does not mean that the plaintiff presented an objectively unreasonable claim or that it was frivolous. See Earth Flag, Ltd., supra, CK Co., supra., Brod, supra and Waite, supra. The federal courts have properly understood that such a rule would serve to "chill" the rights of copyright plaintiff to not pursue their legal rights under the Copyright Act if it were to do so on the pain of paying an extraordinary amount of attorneys' fees and costs to a copyright defendant. Indeed, a staggering fee award in favor of Defendants would only add insult to the injury already incurred by Plaintiffs. This is especially so where, as here, the case is "close" and presents a case of first impression in the Ninth Circuit. 3. Plaintiff's Motivation.

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Defendants baldly assert that Plaintiff's motivation to pursue this lawsuit was not in good faith and was done only to harass Defendants. Nothing could be further from the truth. The truth is that Plaintiffs did not want to file this lawsuit. Plaintiffs let a period of time pass in the hope that their feeling of being violated through the infringing 13
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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
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activities of Defendants would dissipate over time. Due to Defendants' actions, Mr. Dyer lost the zeal to continue working as a wildlife photographer. This action was filed because Kent Dyer felt a strong conviction that he was wronged through Defendants' actions. Plaintiffs' intentions in filing this action were honorable. Throughout this litigation, Plaintiffs have handled themselves respectfully and responsibly. Plaintiffs' objective in filing this action was to right a wrong and to protect the rights of wildlife photographers. After Defendants stipulated to the Preliminary Injunction, efforts were undertaken to determine the amount of Defendants' profits from the infringing sculpture. The record in this case demonstrates Plaintiffs' diligence in initiating and pursuing settlement discussions. Plaintiffs also took affirmative steps to make themselves available for mediation to resolve this dispute long before discovery commenced and attorneys' fees and costs increased exponentially. Defendants misled Plaintiffs about their desire to settle this case and/or to mediate. Defendants also mislead this Court on August 3, 2004 when, through counsel, they indicated they would participate in mediation with Plaintiffs. The Factual

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Overview section of this Memorandum details Defendants failure to provide mediation dates to Plaintiffs. At the second status conference on October 25, 2004, Defendants reported they would prefer to engage in discovery before mediation would be considered. Curiously, Defendants had set forth their position in this case through a July 19, 2004 letter from Attorney Zeman to undersigned counsel. It appears that Defendants feigned interest in settlement and mediation when they had already decided to forge a course of "hardball" defense of this case. Had Defendants elected to participate in settlement discussions and/or mediation of this dispute in 2004, it is likely that no attorneys' fees and costs would have been incurred in 2005 and 2006. 4. The Advancement of the Dual Goals of Compensation and Deterrence.

Given the close factual and legal issues in this case, and because this case presents a matter of first impression in the Ninth Circuit, there is no credible argument that an award of attorneys' fees and costs to Defendants will advance the dual goals of 14
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compensation and deterrence under the Copyright Act. As a practical matter, any award of attorneys' fees and costs in favor of Defendants on these facts and circumstances will serve to "chill" copyright infringement plaintiffs in the future who will be deterred from advancing reasonable copyright infringement claims for fear that if they are unsuccessful, they will be tagged with a massive award of attorneys' fees and costs. The Court's decision in this case is already a topic of discussion on various internet "blogs" and message boards that cater to artists and photographers. The vast reach of the internet will "get the word out" in the artistic community. It is these concerns and fears that were addressed by the Earth Flag Ltd. Court, the Lotus Dev. Corp. Court, and by the United States Supreme Court in Fogerty. It is also firmly-established that there is no automatic entitlement to an award of attorneys' fees and costs just because a defendant prevails in a copyright infringement claim. To award Defendants any attorneys' fees and costs in a close case such as this will send the wrong message to the intellectual property community. Namely, that the stakes under the Copyright Act are "winner take all." Such a message will undermine the purposes of the Copyright Act and will "chill" future plaintiffs from pursuing their legal rights under the Copyright Act. IV. DEFENDANTS' FEE APPLICATION IS EXCESSIVE The factual portion of this Memorandum entitled "Analysis of Defendants' Fee Application" details numerous significant differences in the work performed by Plaintiff's counsel and Defendants' counsel in this case. The Court must carefully examine Defendants' Fee Application for reasonableness. Plaintiffs submit that

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Defendants' Fee Application is unreasonable, excessive, reveals the performance of duplicative work, illustrates minimum use of paralegals and shows no use of associate attorneys. Defendants' fee application seeks an amount of attorney's fees and costs that is approximately $60,000.00 greater than those incurred by Plaintiff! The Court may take judicial notice that Snell & Wilmer is the largest law firm in Arizona. Snell & Wilmer's website represents that they have more than 400 lawyers 15
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firm-wide and six offices. Based on a recent review of Snell & Wilmer's website, it appears that there are approximately 16 intellectual property associates that work for the firm, yet none were used in this case. Snell & Wilmer has vast human resources, yet Defendants' Fee Application shows a mere 3.7 hours worth of paralegal time. Snell & Wilmer' Fee Agreement attached to Defendants' Motion for Fees at Exhibit 2, expressly states that "other attorneys or paralegals may work with me in representing your interests in order to provide you legal services in the most cost effective and efficient manner. Work performed by associates range from $160 to $200 per hour, and work performed by paralegals is currently $150 per hour." (Emphasis added).

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Notwithstanding these representations to Defendants, all attorney work was performed by Ms. Zeman at a rate of $340 to $375 per hour versus a much lower rate of $160 to $200 per hour for associates who could have performed the vast majority of the legal research, compiling of exhibits, reviewing documents, and the like. The same holds true with the minimal usage of a paralegal for only 3.7 hours. It is puzzling to Plaintiffs as to why an experienced intellectual property lawyer like Ms. Zeman had to expend 336.2 hours on this "straight forward" copyright case. Logic would dictate that the services of a lower hourly rate associate attorney would make sense in order to keep fees down for Defendants. Undersigned counsel is also confounded with the excessive and duplicative amount of work performed by Ms. Zeman on discovery issues, motion practice, review of discovery responses, drafting and revising stipulation and orders, and the like. In the final analysis, Defendants' fee application is unreasonable and this Court must deny Defendants' Motion for Fees. V. RELIEF REQUESTED FROM THE COURT Based on the foregoing points and authorities and the analysis of the four Fogerty factors, Plaintiffs have demonstrated that the factors identified by the United States Supreme Court strongly preponderate in their favor. Accordingly, this Court should deny Defendants any award of attorneys' fees and costs on these facts. 16

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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C.
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

RESPECTFULLY SUBMITTED this 18th day of December, 2006. HYMSON GOLDSTEIN & PANTILIAT, P.C.

/s/Christopher D. Lonn Christopher D. Lonn 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 Attorneys for Plaintiffs

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1 2 3 4 5 6 7 8 9 HYMSON GOLDSTEIN & PANTILIAT, P.C. X

CERTIFICATE OF FILING

I hereby certify that on December 18, 2006, I electronically transmitted the

attached document to the Clerk's office via the CM/ECF filing system for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Laura J. Zeman SNELL & WILMER One Arizona Center # 1900 400 E. Van Buren Phoenix, AZ 85004-2202 Attorney for Defendants

/s/Linda O'Hara
Attorneys & Counselors 14646 N. Kierland Boulevard, Suite 255 Scottsdale, Arizona 85254 Telephone: 480-991-9077 / Facsimile: 480-443-8854

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