Orrick Loses Bid To Recoup Fees from Publisher Wiley
Judge Donald Pogue of the U.S. Court of International Trade, sitting by designation in Manhattan U.S. District Court, forcefully denied that request Friday, holding that Wiley's lawsuit "represented the legitimate attempt of a copyright holder to enforce its rights."
Wiley, which produces and sells textbooks around the world, prices its English-language foreign editions cheaper than its nearly identical U.S. editions. Kirtsaeng, a entrepreneurial young Thai man studying in the U.S., made a tidy profit by selling these foreign editions to U.S. consumers. Kirtsaeng's lawyer, New York solo practitioner Sam Israel, argued that his activities are protected under the first-sale doctrine of copyright law, which holds that someone who buys a copyrighted work may resell it without the permission of original copyright owner.
Pogue initially rejected that defense in 2009, holding that it doesn't apply to copyrighted works manufactured abroad. A jury found Kirtsaeng liable for willful copyright infringement later that year, and the U.S. Court of Appeals for the Second Circuit affirmed in 2011. But the U.S. Supreme Court finally tossed Wiley's case last March, ruling 6-3 that there's no geographical limitation to the doctrine. E. Joshua Rosenkranz of Orrick, Herrington & Sutcliffe represented Kirtsaeng pro bono at the high court.
Kirtsaeng's lawyers wanted Wiley to pay more than $2 million for the reasonable value of their services. Unlike Rosenkranz, Israel charged Kirtsaeng. In an interview, Israel said he was seeking about $150,000 to cover his work and that the balance of the $2 million would go to Orrick. We reached out to Rosenkranz but didn't hear back.
Kirtsaeng's lawyers didn't claim that Wiley's copyright case was baseless. Instead, they argued that fee-shifting is appropriate because Wiley engaged in "vexatious" tactics, such as trying to hold Kirtsaeng in civil contempt for transferring $6,000 out of a bank account (Kirtsaeng's lawyers said he needed the money for living expenses). "They did a lot of things that were atypically aggressive," Isreal told us.
Pogue wrote in Friday's decision that while some of Wiley's conduct was "arguably aggressive," the company didn't act unreasonably. He noted that Wiley's claim was strong enough to persuade the district court, the Second Circuit, and three Supreme Court justices.
"I wouldn't say that I'm extraordinarily surprised" by the ruling, Israel said. "It was a close call."
Matthew Oppenheim of Oppenheim and Zebrak, who represents Wiley, was not available for comment.